Is a Hunting Acre More Valuable Than a Tillable Acre?
To find out what conditions really are in the field, you’ve got to get out in the field.
The same holds true in real estate markets.
We were curious about what real estate agents, who specialize in farmland, were seeing and hearing.
What are buyers looking for? Who are the buyers? What’s hot and what is not? Are prices heading up or down? One surprising thing we learned was the size of the impact of hunting.
The first agent we spoke with was Wade Fitzmaurice of Midwest Land Group. His company lists and sells farms in western Missouri and Kansas. Wade claims, “There is a lot of out-of-state demand for Missouri land, especially for hunting.” He says that one of the big factors is the cost of out-of-state hunting tags.
According to Wade, “You don’t have to go through a lottery system in Missouri, and the fees are reasonable.” Out-of-state deer permits are apparently only $225 in Missouri, but in other states, like Illinois, they are $500 and higher. Wade also says that hunting lease rates have increased quite a bit in Missouri from what used to be $2 per acre to $20-plus an acre now in a lot areas.
We also chatted with Shane Yearian of Trophy Properties and Auction. He focuses on agricultural land in south-central Illinois that has a mix of tillable and wooded acres.
According to Shane, his buyers are looking for the big bucks. “I run a lot of game cameras, and those pictures make a huge difference in how fast a farm sells,” he said. Hunters want to see some evidence of wildlife on the properties they’re interested in.
Shane claims that he has been seeing hunting acres on the way up and tillable acres on the way down in his territory. We asked if the prices have crossed over yet, i.e., is a hunting acre more valuable than a tillable acre? According to Shane, tillable acres in his main area are down to about $4,500 from a high in excess of $6,000 four to five years ago. However, he says that hunting acres are up to about $3,500 from what used to be $2,500 not that long ago.
Another agent we talked to was Marty Canterbury of United Country Missouri Land & Home. He said he has been surprised by the recent demand for pastureland in central Missouri. He sees prices of $2,500 to $4,000 an acre and people looking from as far away as Texas.
Canterbury mentioned, “They are looking to invest somewhere that it rains. They’re tired of droughts and dead grass.” Marty also mentioned that he’s getting calls from farm investors in Iowa, Illinois, and Nebraska who are trying to escape high farm real estate taxes in their home states. According to Mr. Canterbury, Missouri hasn’t yet seen the $20- to $40-per-acre taxes that some of the other Midwestern states have implemented.
The last agent we spoke with was Wayne Keller of buyafarm.com, which covers a large area of central and southern Illinois.
Wayne talked about farmland prices, saying, “If I had to guess, farmland prices are down 15% in southern Illinois. Investors are sitting back and waiting to see if they’ll come down more.”
However, Wayne says that there is still demand for all-tillable pieces in the right location. “It’s a neighborhood thing - how many strong farmers are in the neighborhood? It’s simple supply and demand,” Wayne says.
According to Wayne, it’s rare in Illinois for all tillable pieces to hit the market. So, when they do hit the market in areas with financially strong farmers, the farmers will still compete to add the parcel to their operation.