November 2021 Land Prices
Land Prices for the month of November 2021 were again stable to higher month over month. We had many types of sales this month for many types of property and in all categories land was up. The general consensus from buyers is that interest is low, everything to do with income is high and there is not secure investment alternatives to land currently. That paired with conversations with buyers about inflation and future tax and basis changes has land prices stable even though a substantial amount has become available over 4th quarter.
Farmland has not been the only category to see a substantial increase even though that is where many of the headlines have focused. Yes, we have seen an increase in that space from 20-30% however the hunting land and rural recreational property has increased nearly 50% on average overall. The explanation is primarily scarcity and affordability even though an argument could be made for increased timber values, CRP and tillable land rent factoring in on the price. The want for a place to put in food plots for hunting, have a cabin, rural home, pond or place to shut out the world and call your own has never been higher. When that is paired with interest rates in the 3.25-4.25% range with long term Amortization schedules, rate lock terms and a lot of cash or equity increases in the country we have affordabilit being a major factor more than cashflow.
Farmland on the other hand has not let off the gas and I am not sure if it will or should I say when it does I think we will see another plateau mirroring 2013-2018 if I had to look at a crystal ball. Interest rates are getting locked in for 10-30 years, the stock market has been in park for some time and corn remained north of $5.00/bu after one of the largest yielding harvests the Midwest has ever seen. This tells me operators and investors alike will have cash pre and post end of year and there will be purchasing power into 2022. Inputs are one item we are watching closely as rents and fuel prices climb as well as fertilizer, chemical, equipment and seed shortages all become concerns.
We have many auctions lined up in December as well as pages of property available via traditional listing on our website at www.highpointlandcompany.com. If you or someone you know is looking to take advantage of a 1031 exchange into farmland or hunting land purchase contact one of our agents today. They are very knowledgeable on the topics of land we specialize in.
Have a safe end to harvest and hunting season, we are grateful for the opportunities you have given us in the land business.
About the Business