What is in this article?:
- Pace has slowed, but farmland values still rising
- Hiccup in activity
• Last year's rush, prompted by economic uncertainty and tax law changes, continues to have an impact into 2013.
• High quality land is still in demand, and buyers are competing for top acres that are currently in short supply.
An accelerated farmland sell-off at the end of 2012 has led to continued low supplies of premium quality property, according to Farmers National Company, the largest farmland and ranchland real estate company in the country.
Last year's rush, prompted by economic uncertainty and tax law changes, continues to have an impact into 2013. High quality land is still in demand, and buyers are competing for top acres that are currently in short supply.
Competition for land has kept values strong, averaging 20 percent higher values over comparable land in 2012. Much of the continued rise is due to auction activity driving sales prices as purchasers vie for parcels of land. Mid- to high-quality properties are still seeing such rises in value, while lower quality land values are staying steady.
"Values are still going up, but the pace has slowed overall," said Derrick Volchoff, ALC, vice-president of real estate operations at Farmers National Company. "Many transactions for high quality land are being sold via auction, which drives prices through competitive situations."
Auctions today have turned very competitive with bidding wars becoming the norm for high quality land sales. Areas of the country that normally do not run auctions, such as the Delta region, are now seeing them on a regular basis, according to Volchoff.
"Despite an overall moderation in the number of sales transactions since the end of last year, there has been noticeable growth in the size of parcels being sold per purchase," said Volchoff.
Moving into the third quarter of 2013, Farmers National Company expects the number of transactions being closed to increase, based on activity seen in the past 60 days.