One of these things doesnt belong.....

[Muskrat24]

I think lots of these older landowners are going to look for young farmers rather than selling at top dollar to corporate farmers or land investors (if no heirs in line). Just a hunch. Pretty confident they will avoid foreign investors unless the buyer hides it (has a front person).

Good luck. A few will but most will look to the established operations that have nice equipment and pay good rents!

 

[jflournoy]

I'm sure the time frame when land and rates were lower just previous to the rates and prices now, there was a lot of cherry picking and an overall higher level of purchases in general. I'm sure there are some real duds and possibly some good properties sitting at too high of price now as there were also properties sitting when the market was on fire, priced too high even in that market. One should expect some kind of lull after that buying frenzy. I also believe there are "overpriced" pieces that are much more of a value than one priced at "real market value" that will sell. Beauty is in the eye of the beholder. Some people may feel getting a "diamond in the rough" purchase for a cheaper price and then fixing it up into something special is more of a value than buying a "turn-key" place at a "premium" price.

When I commented grey, I wasn't talking about the actual sale price but rather how they arrived at that price. I will be closing on a property in January that is well under real market value. I'm sure there are plenty sweetheart deals out there with the ageing farmer or his wife that sells to family or close friend. Yes that certainly happens, but I don't really consider those type sales part of the "market" because the public doesn't know they were ever for sale until the deal is closed and done, therefore the closing sale price wasn't affected by "open market" financial forces. Plus "friends and family" discounts set those deals apart from "real market value" also.

I'm sure you'll know the answer to this but curious on how that can skew the averages on any given year as these farmers pass the baton to the next generation in their circle of friends and family at lower prices. I don't think the "sweetheart" and "friends and family discount" deals have much bearing on the average prices of land in the open/public market. Again, because most people don't know about those sales and aren't spelunking on the tax assessor site spending hours finding them in the sales search data. I think those private sales may sometimes be a better reflection of *fundamental* land value than the "market value" prices that land sells at on the open market. But I'm sure there are plenty of realtors who would disagree with me and say that a piece of land is worth whatever someone is willing to pay for it. And in a capitalist society that is technically true. But how many sales of similar pieces of land at a similar price level in a similar area on the public market equals a new market value benchmark? It happens *very often* that a piece of land sells for higher than you'd think it might, because you find that one "just right" buyer who has to have it for one reason or another. He's got a house nearby. Family nearby. He's the neighbor. He has a fast approaching 1031 exchange deadline. Any number of extenuating circumstances that might make a piece sell to a single person for a price no one else offered. Does that mean that price is the new "real market value"? If there were extenuating circumstances then I don't think that means that's the new "real market value". If it happens multiple times, with no extenuating circumstances, well then that's a different story.

 

[jflournoy]

Way more than I would have guessed. I wonder if that number will go down after this wave of baby boomers are gone?

Hard to believe that a *lot* of land in southern Iowa won't hit the public market for sale in the next 10-15 years. There are an awful lot of farmers who are ageing out and a lot of kids that aren't sticking around on the farm, they're moving north to better paying city jobs and in a lot of cases don't want to mess with the management of a farm that they're not still emotionally or sentimentally connected to in some deep way.

 

[jflournoy]

All the private sales I know of haven’t gotten any “deals” from family members. Basically saving the realtor/auction fee is enough for them. They just get offered first is the only “win” I’ve seen

I've seen it both ways. The tax assessor sale record usually notes if it was a sale between family members. Sometimes I'm surprised at a lower sale price, but often the land sells for about what it's selling for on the public market.

 

[JNRBRONC]

Good luck. A few will but most will look to the established operations that have nice equipment and pay good rents!

A neighbor selling a parcel approached me to match an offer. Like an idiot, I turned it down. Regrets.


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[Windlooker]

From the 2023 ISU study :

The survey asked respondents what percent of the land was sold to six categories of buyers: existing local farmers, existing relocating farmers, new farmers, local investors, non-local investors, or other.

The majority of farmland sales, 70%, were to existing farmers, of which existing local farmers captured 69% of land sales. Only 1% of sales were to existing relocating farmers. New farmers represented 4% of sales. Investors represented 24% of land sales, with 12% going to local investors and 12% to non-local. Other purchasers were 2% of sales.

 

[IowaBowHunter1983]

From the 2023 ISU study :

The survey asked respondents what percent of the land was sold to six categories of buyers: existing local farmers, existing relocating farmers, new farmers, local investors, non-local investors, or other.

The majority of farmland sales, 70%, were to existing farmers, of which existing local farmers captured 69% of land sales. Only 1% of sales were to existing relocating farmers. New farmers represented 4% of sales. Investors represented 24% of land sales, with 12% going to local investors and 12% to non-local. Other purchasers were 2% of sales.

And where would rec buyers fit into this? Combo farms they cash rent and enjoy the recreation. I wouldn't call those people investors. Or farmers.