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.
Hiccup in activity
"During the first two quarters of 2013, there has been a hiccup in activity based on the surge at 2012 year-end," said Volchoff. "However, the trend seems to be shifting upward again and transaction numbers for the balance of the year should remain relatively steady."
Investors are sticking with land as a safe, long-term investment while farmers are putting cash from past yearly profits back into operations. Built up cash reserves for farmers are prompting farm operators to buy premium land when it becomes available to add to their inventory and to accommodate the return of younger family members to farms.
For both groups, economic uncertainty is still driving purchase decisions. Farmers are looking for premium land on which to expand, while investors may purchase properties based on price and projected return on investments.
"Even with recent drops in crop size for farmers, profits are still at a level higher than in 2010," said Volchoff. "Farm debt is still low in relative historical terms."
According to Volchoff, several issues in the U.S., such as healthcare and interest rates are likely to impact economic trends and thus land inventory levels and sales activity once they are resolved.
The direction of market and political issues will likely shape the rest of 2013. As the housing market improves, developers will likely begin to buy land for development. This could trigger more 1031 tax deferred exchanges pushing new money into the market.
Farmers National Company, an employee-owned company, is the nation's leading agricultural real estate and farm and ranch management company. The company has sold over 3,500 farms and more than $2.0 billion of real estate during the last five years.
Farmers National Company currently manages more than 4,700 farms in 24 states. Additional services provided by the company include auctions, appraisals, insurance, consultation services, oil and gas management, lake management and a national hunting lease program.
For more information on land listings in your region, visit the Farmers National Company website at www.FarmersNational.com.
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