Things that make me go Hmmmmm....Land Prices

[IowaBowHunter1983]

30,000' view

Good farms are still moving quickly. Prices have been overall pretty steady on "deer farms". Down from very top of peak but not much.

Houses/acreages over 500k are WAY slowed down. Residential market in general has had a major shift to a buyers' market.

Tillable down obviously with year 3 of lower commodity prices.

 

[smithhunter1975]

How big of a radius u guys willing to go? If I go about 15 mile radius- I can occasionally find things to buy. Can be rare. If I can go 45 mins…. There’s “quite a few” where used to hardly be any good buys. In my experience - northern 2/3rd of state it’s always been fairly slow on turn over & hard to find good farms. Which makes it super tough short or long term. Would u guys ever be willing to drive like 60-90 mins?

For my next farm I am looking for something within 15-20 miles from home. Have family farms 45 minutes from home and find it very difficult to hunt them. All day hunts not a big problem but hard to slip out for just an afternoon or just a morning hunt. 45-60 miles opens up those counties that always have farms being bought and sold

 

[booneriverbucks]

Regardless of current land prices, it is at the very least a great time to approach landowners about stuff that is not on the market. Most farmers will be low on cash for the foreseeable future. Might be the best time to convince some to part with some of their non/low income producing land. Doesn’t hurt to ask at least.

 

[Jerry Gille]

It's a small sample size I know but 2 rec properties just sold around me in west-central Illinois at auction. 75ish acres of pasture and timber brought $8k an acre and 42 acres (17 hay ground and the rest timber with a couple small outbuildings) brought $11,300 an acre. Seemed pretty dang high to me. I was blown away by the $11,300 an acre place.

 

[CottonwoodCanyon]

It's a small sample size I know but 2 rec properties just sold around me in west-central Illinois at auction. 75ish acres of pasture and timber brought $8k an acre and 42 acres (17 hay ground and the rest timber with a couple small outbuildings) brought $11,300 an acre. Seemed pretty dang high to me. I was blown away by the $11,300 an acre place.

Is that consistent or high with what you've seen prior to now? Good rec/combo ground has held steady. Those $/ac are nuts, but a totally different market.

 

[Jerry Gille]

Both of those were at auction and both were high.

 

[CottonwoodCanyon]

They say auctions are the true test of market conditions but sometimes there are extenuating circumstances. Do you know anything about the buyers? Are they neighbors, non residents, Chicago area?

 

[Jerry Gille]

I think the buyer on the $8k place is a professional baseball player. Kind of hard to tell as there's a shell company involved. He owns 450 acres next door. I live just down the road and I don't even know for sure. It is still very common for outside interests to own land in the famed Illinois "Golden Triangle" even though deer hunting here isn't what is used to be. But someone was bidding right there with him. I have no idea on the other place.

Again, these two most recent auctions in my county represent a small sample size and may or may not reflect a trend.

Also, I get texts weekly (the last 3 days in a row) from sources wanting to buy my land. Letters come in the mail and phone calls occur too. I block these contacts constantly, but they still come like all the other unsolicited junk we get. You get a an $8k an acre comp down the road and a $11,300 an acre comp 12 miles away coupled with landowners getting unsolicited calls, texts and letters all the time what do you think is going to happen anytime you approach the guy next door to try and buy some of his timber?

 

[CottonwoodCanyon]

Spot on. Sounds like someone with some deep pockets wants to further insulate himself from IL regulations. Can't blame him!

 

[Sligh1]

Ya - when some neighbors or “one guy” has to have it…. Those chunks go bananas & represent the record breaking prices that no appraisal will ever support. Baseball player - millions in income - so u over pay by $2-3k an acre… “have to do it” & that’s the attitude I’d have if I had a farm I really wanted come up next to mine. I’d maybe care for the bit of sting of paying for it once & never look back. The #2 guy that almost got it for way above market- usually a neighbor with deep pockets too. Those examples cost one buyer big $ & make a seller rich very fast & that seller got super lucky that his neighbors had to have it.
What usually happens- the guy 2-3 miles away will say “well mines worth that!!!” …. Tries to get that kinda $ & flops. Seen this million times. We just had a tract by me in the hundreds of acres go for like $7600-ish…. I think it had zero or close to zero income. Pasture land with timber. That quality of dirt in “normal area” where neighbors not in pissing match…. $5-5500. Again- it’s basically pasture & timber. Had it been Timber & high quality tillable, $7600-ish, ok I get it. But pasture …. they over paid probably $2k per acre vs if it were located in another area. That’s hundreds of thousands more than what it’s worth. Seen it many times & the next funny one that happens in those examples…. “I paid $2k over market value”…. If they have tillable …. “This farmer will only pay me $150…. No way. Know anyone that will pay $175-200?” Folks can piss away hundreds of thousands & a year later they will squabble over a couple grand in cash rent. Just ironic.
Sorry on the ramble. Bottom line: ignore the outliers. Don’t copy the dudes paying ridiculous prices. Only pay that ridiculous price if it borders you, you can afford it and “have to have it”. For every obscene sales price…. Pry Be 6-10 fair to good deals around right now.