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2019 Land Value Outlook
Mark Twain once said, “Buy land, they’re not making it anymore”. Farmland sales remain strong in some areas of the country, but not as much in others. Local supply and demand is a huge factor in farmland sales, as is the hit to a farmer’s pocketbook due to low commodity prices.
Kurt Hollenberg with the Realtor’s Land Institute says last year on average, land values were up about two-percent.
"As of right now, we don’t see that changing anytime in the near future, so we’ve seen commodity prices leveling off considerably and reverted back to probably 8-to-10- year lows," says Hollenberg. "But, we still see a very positive attitude in the ag land."
As land comes up for sale, he says there will be buyers. And they’re not focused on one specific use.
"I think from a selling standpoint what we’re seeing is, people that are looking at the next 1-5 years have kind of gotten on the bandwagon and said it’s probably a good time now with the way the cycle is to go ahead and start to sell. Buyers, there seems to be a vast array, depending on what part of the country we’re in," he says. "They’re buying row crop farms, they’re buying produce farms, some of these unique properties."
In 2017, Hollenberg says family buyers accounted for 61% of the land purchases, with a strong portion of that being local buyers. Established farm owners with money in the bank at low interest rates think buying farmland can provide a good return. However, rising interest rates in 2019 could affect where land prices are going.