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Successful Land Sale: Investors Buy Linn County, Iowa, Farm for $7,920 an Acre

Eastern Iowa farm tops out at $9,000 per acre.

Hertz Real Estate Services auctioned off two tracts of land totaling 200 acres, just south of Palo, Iowa, in Linn County on June 30.

Linn County Iowa
This sale was unique on a couple of fronts. One, it was court-ordered, so there was no reserve on the land. Two, the bidders were mainly all investors, which is evidence that the land market has undergone a correction, says Hertz’s Troy Louwagie.

“Most investors know that if there is a 20% correction in land prices, now is the time to get in,” Louwagie says. “A lot of people have a lot of money. If they have cash invested in the stock market, it is not doing much. They’re fed up. They want something tangible that they can feel.” That the land is close to Cedar Rapids allowed urban buyers a chance to buy a piece of property that they can enjoy, he adds.

Here's how the land sold:

  • Tract 1: 120 acres (96.2 acres tillable) of level to slightly rolling land featuring Atterberry, Muscatine and Waukee soils, with a Corn Suitability Rating 2 of 83.0 (based on a 5 to 100 scale). The balance is in trees and an older farmstead with below-average home. The tract is rented and the buyer gets the second half of the 2016 cash rent, totaling $12,168. It sold for $864,000 ($7,200 per acre).
  • Tract 2: 80 acres (72.8 acres tillable) with mostly Tama and Muscatine silty clay loam, and Dodgeville silt loam soils with a CSR 2 of 83.0. There are 2.4 acres in Conservation Reserve Program, paying $564 per year through 2019. The buyer gets the second half of the 2016 cash rent, totaling $9,209.50. Tract 2 sold for $720,000 ($9,000 per acre).
  • In all, the land sold for $1.584 million, or $7,920 per acre.

In 2015, Linn County farmland averaged $9,093 per acre, and cash rent averaged $261 per acre. According to Iowa State University, the last decade in Linn County, corn has averaged 172 bushels per acre and soybeans, 51 bushels per acre.

For more, log onto Hertz Real Estate Services.

Best of the Rest

Indiana: Sullivan County: Schrader Auction sold 389.5 acres in 11 tracts about a mile southwest of Farmersburg. The sale featured farmland, farm headquarters with home, shop, storage, and grain storage. Tracts 1, 2, 3, 5, 6, 9, 10, and 11 featured 329 acres of farmland (about 200 acres tillable) with mostly Reesville soils. The balance is woods and recreation. It sold for $1.275 million ($3,772 per acre). Tract 4, 18 acres, is in woods. It brought $110,000 ($6,111 per acre). Tract 7, the 5.47-acre farmstead, which has a nice home, older Morton building, large poleshed, and about 70,000 bushels of grain storage, sold for $86,000 ($15,722 per acre). Tract 8, 27.95 acres, has 18 tillable acres and the balance in cropland. It sold for $120,000 ($4,293 per acre).

Kansas: Pratt County: 146 acres of irrigated ground a couple of miles northwest of Byers sold July 6. The tract has 141 acres under irrigation, with the balance in dryland corners. Soil types are sandy loam, and the field is level. It is planted to corn, with the buyer receiving a third of the crop and paying a third of the expenses. A neighboring farmer bought the land for $945,350 ($6,475 per acre). Hamm Auction and Real Estate had the sale.

 

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