September 2021 Land Prices
Harvest is in full swing as we enter October! Land Prices for the month of September 2021 remained very strong remaining stable as we close on Quarter 3. Looking ahead, we currently have 3,500+ acres scheduled for auction in Q4 across Iowa, Minnesota and Wisconsin, featuring A+ quality farmland, prime recreation ground and highly sought after building sites. In addition to upcoming auctions, High Point also has 3,600+ acres available via listing across Iowa, Minnesota, Wisconsin, and Colorado. Properties available feature gorgeous acreages, investment-grade farmland, prime hunting & timber land as well as ranches available and multiple commercial opportunities.
Auctions continue to “set the bar” across the land market and show no signs of slowing. In Iowa, High Point auctions have averaged over $160/CSR2 point across tillable acres and an average of nearly $10,500/acre. The land market continues to exhibit strength strong for 4 main reasons remaining consistent with last month's newsletter. Interest rates on land are consistently in the 3-4% range allowing the buyers and operations to have a lower payment and pay more for the property. Pair this with longer amortization schedules, rate lock terms and aggressive lenders competing with one another and you have favorable buying conditions. Commodity prices, particularly corn and soybeans remaining stable in the mid $5’s and mid to high $12’s as we enter harvest. Prices remaining high allow operations and farms to expand, especially when paired with low interest rates. Throughout 2021 we have experienced low volume in the land real estate market, echoing other sectors of real estate markets. Government payments combined with other favorable buying conditions led to increased demand from buyers across all real estate markets. This increased demand has remained consistent, if not increased, today as favorable buying conditions allow buyers to pay more per acre without their payments increasing and land is turned to as a more stable investment to escape the volatility of other markets. Other markets continue to inflate and have a high cost of entry, land is looked at as a safe investment which allows you to experience a consistent rate of return, appreciation, tax benefits, and the benefits of increasing equity through time which comes with real estate investment.
While we are beginning to see an increase in volume come to the market, there simply is not enough supply to keep up with the build up in demand. The long list of registered bidders for each land auction echoes this statement. It could make a lot of sense for your family or operation to explore a sale in this market. There is still plenty of time in Q4 to close on your property. Whether you are considering a sale or adding acres, give one of our land agents a call today.
Another area where we continue to see growth is our land appraisal department that tracks every sale to use as comparables for appraisals for banks, estates, land owners, trusts, and many other purposes. If you are wondering what a property is worth in today's market, making a purchase, or settling an estate and are in need of a land appraisal in Minnesota or farm land appraisal in Iowa our team appraisers are very quick and cost effective.
Have a safe and successful harvest and thank you to all of our wonderful clients.
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