Farm Real Estate 2016 Review
We have many people to thank for a great 2016. From farm families who trusted our team to handle a very personal once-in-a-lifetime sale of the family farm to our own families, friends and colleagues who have supported us in the farm real estate business, we are very thankful for a successful 2016.
Many believed that we may see an increase in interest rates for loans on farm real estate in 2016, but as of today, this hasn’t happened. Additionally, farm cash rent rates (price per acre) adjusted downward for many farmers and while this has somewhat reduced ROI on lower quality farmland, investors and landowners of top quality tillable acres are still seeing cash rents in our local area over $300 per acre in some Indiana counties. Overall though, we have seen quite a bit of downward adjustment to account for lower farm incomes in 2016.
- No increases in farm real estate loan interest rates
- Cash Rents Adjusted
- Fertilizer & Seed Adjustments
- Land Values Adjusted based on Soil Quality & Location
By The Numbers
- 96% – total percent of listed price attained on all tillable agricultural farms sold by Geswein Farm & Land in 2016
- 1,055 total number of acres of land Geswein Farm & Land sold in Indiana in 2016
- Wooded Land Values continue to rise – stronger demand & low inventory
- Top Quality Farms – Some farmland sold for over $12,000 per acre in 2016
Who is Investing in Farm Real Estate?
Throughout 2016 we saw a new wave of farmers investing in farmland. Many farming operations that sat on the sidelines during the big run up in farmland values were frequently bidding on smaller tracts of agricultural land. Additionally we saw many Institutional Investors as well as private Investors moving 1031 money into agricultural farmland. Reason for land investment ranged from portfolio diversification to simply creating steady cash flow based on the longterm performance of farmland vs. the stock market. Several buyers indicated that having a tangible asset was an important factor in their decision to invest in farmland.
Wooded Property For Sale
The trend in 2016 for wooded land continued in the same direction as 2015, higher prices per acre, very little inventory for sale in Tippecanoe County, and an increase in the number of buyers. In areas such as Warren County, if the land for sale is in close proximity to West Lafayette, we continue to see the price per acre on the rise. Wooded property with timber value is also in a stronger demand situation. Low inventory of “wooded retreats” or wooded country estates has contributed to a continued run up in price per acre.
2016 Market Highlights
- 460+ Acres of Wooded Land Sold
- 145+ Acres Currently Under Contract
- Multiple Wooded Tracts sold at $9,000+ per acre
As always, one of the most important parts of our job is to keep you informed of the market. In the meantime, we continue to monitor sales, the price per acre and where land values stabilize as investors seek to move money from the stock market to more stable long-term investments.
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