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Land Prices

Elitebowhunter

Elitebowhunter

New Member
How high will they go??

Here is a local news headline.....

(Audubon) Over 300 acres of farmland sold at an auction earlier today set a new Audubon County record high price. Lyle Hansen, owner and Broker of SWI Real Estate Company, says the land was located in northern Audubon county on the east side of highway 71. The 312 acres brought $10,200 per acre. Hansen says the land was purchased by a local farmer. Hansen describes it as a good piece of land in a good community. He reported that the land had a CSR of 68.7


anyone got 3 million bucks layin round.
 
Hard to say. I can't see it continue to increase as it is-then again-they aren't making anymore and perhaps we are catching up to other areas of the country that years ago were unbelievably high. If you look around our state-it is becoming what more people are wanting.

Quiet, space, ability to hunt, walk around, raise their kids etc. The housing market isn't comparable but the land seems to being doing very well.
 
I never buy things at record highs. Even if it could go higher and probably will. "Buy when others are cautious and be cautious when others are greedy" Warren Buffet. Now, the area that's still a HUGE discount IMO is Rec ground. That's a whole can of worms BUT $2k an acre or even 3k is vastly cheaper than ANY comparable ground in WI, MN, IL, OH, PA, IN, etc. You do get cheaper as you go out west to drought and prairie areas BUT for stuff that's similar to IA land, it's vastly higher everywhere east. We also had the economy give a huge blow to rec ground prices SO IMO- we're at a discount there (buying when others aren't) and it's a great time to buy, IMO. Then there's the whole tag discussion & it'll go on BUT great time to buy.
I think I'm done on the ag-ground purchasing. I've got my income producing ground with my main farm and my wife and I have an all tillable piece way NW of me BUT I'm done for a long time unless things come way way down from record highs. I've seen similar crazy prices with houses, stock market, etc. Not even the experts know what will happen BUT this guy ain't buying at those crazy prices for straight ag.

*I'm sure the guy that bought above is farming himself BUT pretend an investor bought it. PRETEND he borrowed every penny for it. Say it was $3 mill on the dot. Depending on financing, let's say his payment was around $200,000 per year (that's AROUND accurate). Then, 68 CSR, let's say he got $250/acre cash rent.... x 300 = $75,000 in cash rent. $125,000 out of pocket if a guy financed all of it (yes, that would never happen but you see what I mean). That's a rate of return of 2.5% (you'd have taxes later too) if you paid cash as an investor. 2.5% in most folk's books is not a great investment. Paying cash and farming it yourself might be a different game though of course.
 
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I don't think this will be the norm. I'm guessing that 300 acres was 90% tillable? Any kind of land like that is going to be snatched up fast for big money right now with corn and bean prices so high. There are a ton of old farmers that have their land payed for, so they can afford to pay 10k an acre for a new piece because they are able to leverage it against their other properties. Even if they lose money on it for the first 3 years it will be offset by the gains on their currents farms. I don't see Timber prices getting to this, but who knows? I've seen crazier things.
 
My old man always said that land would be a mans best investment. Even in the 80's when everything crashed. Still farms about 1500 acres today.
No matter the prices I think anyone would be crazy to sell land without a purpose.
 
Definately the best investment one could have made in the last 20 years. When the corn and beans come back down...so will the land. Ag land goes down....rec land will fallow. IMO
 
Anything that goes up very fast, pops then slides back. I agree with skip, not a good time to buy. That being said, land that is purchased @ a reasonable price is a great investment long term.

In the next few years, if interest rates go up and commodity prices come down, farm land will drop 10-15 percent but I do not see a crash, as the demand for corn and soybeans will be strong for several years.
 
There are sooooo many variables that go into a land purchase, that can make the property expensive or cheap.
I just got back from a vacation spent in WY with my father in law that's looking to purchse some property.
We did a tour of the whole east side of WY, and prices are anywhere from 300/acre to $5k/acre, and UP!
 
Revup-exactly...location, scenery, recreation, distance to major cities, income, soils, all major factors. Also, interest rates and alternative investments all play a role
 
Monsanto and alot of other big ag companies in the know are predicting 300 bushel national average corn yields in the next 17-20 years. Multiply that by $7 a bushel and you see where the higher prices are coming from... I think just like the 70's into the 80's there will be a good oportunity to buy cheap land soon... Hopefully I'll be in a good position to benefit!
 
DHaffner said:
Monsanto and alot of other big ag companies in the know are predicting 300 bushel national average corn yields in the next 17-20 years. Multiply that by $7 a bushel and you see where the higher prices are coming from... I think just like the 70's into the 80's there will be a good oportunity to buy cheap land soon... Hopefully I'll be in a good position to benefit!
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Your talking like that's pure profit! I have news for you; it cost more to plant an acre today than it use to. Also if the yield stays up the price goes down.
 
What would you guys consider "cheap" hunting ground in IA today? I'm talking ground bought specifically for hunting not farming. How much does price vary say from southern IA vs. NE Iowa? I'm not in the market for land right now and probably never will be, just curious. I had kids.....there went my hunting land!!
 
Bow Ben said:
What would you guys consider "cheap" hunting ground in IA today? I'm talking ground bought specifically for hunting not farming. How much does price vary say from southern IA vs. NE Iowa? I'm not in the market for land right now and probably never will be, just curious. I had kids.....there went my hunting land!!
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The cheap stuff will be pastures and timber. So probably around 3500-4500 would be common around here. Of course the row crop ground will bring 5000+ as we have just seen.
 
Bow Ben said:
What would you guys consider "cheap" hunting ground in IA today? I'm talking ground bought specifically for hunting not farming. How much does price vary say from southern IA vs. NE Iowa? I'm not in the market for land right now and probably never will be, just curious. I had kids.....there went my hunting land!!
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No such thing as good hunting ground with out some decent farming land. ;)

i've seen some going for $1600/acre right now.......
 
cedar creek said:
Your talking like that's pure profit! I have news for you; it cost more to plant an acre today than it use to. Also if the yield stays up the price goes down.
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Take a walk down any grocery isle and look at the back of every type of food you buy. You will be surprised at how much corn is in the food you eat. And all that meat you eat, think of what that animal was fed. The demand for corn and beans is higher than ever.
 
Supply and demand. Take a walk outside and see how much land is there. There will never be more of it than you can see out there right now. Population growth. Land converted to business and residential. Supply and demand. The supply will never be more than now. The demand is yet to be seen but.... think about it...
 
as long as people keep buying groceries and we keep putting ethanol at the gas pumps you are not going to see any ag ground go down in price with all the ethanol plants popping up there won't be a surplus of grain
 
Things are lining up to be like the 80's farm crisis. Land is crazy but as soon as it falls our family will be ready to buy up as much as we can.
 
cedar creek said:
Your talking like that's pure profit! I have news for you; it cost more to plant an acre today than it use to. Also if the yield stays up the price goes down.
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We have around 1000 acres in production, I'm pretty dialed in to the costs involved... There is plenty of profit at $7 corn... Keep in mind one average sized hedge fund could buy the entire corn crop and sit on it for fun, so once there are some positive supply indicators prices will come back to earth and if intereste rates jump quickly there will be alot of 5 year resets that could cause a repeat of the 80's...
 
Sligh1 said:
I never buy things at record highs. Even if it could go higher and probably will. "Buy when others are cautious and be cautious when others are greedy" Warren Buffet.
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Exactly that is along the same lines is, "do what everyone else does...get what everyone else gets"

When things are doubling/tripling...that is the time to sell and wait for when the markets tank as they surely will eventually.

Cash is king tho and if someone has that much laying around...by all means...but it up!!! :way:
 
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