The Farmland Market & What it Means for YOU

 


The Farmland Market & What it Means for YOU

When it comes to the Commercial Real Estate market, what kinds of properties come to mind? I bet I can guess: Retail, Office, and Industrial – The Big Three. However, there’s another sector of CRE that you might not think of immediately – Farmland. If there was ever a market that flew under the radar, it would be this one. While there might be little attention paid to current farmland/agricultural listing inventory, there’s even less paid to who’s buying it.  

So, what is the current activity in the farmland market?

Recently there has been much doom and gloom surrounding the agricultural sector, especially in the last five years. However, values have remained steady and seem to be trying to push upward again, despite all the negativity.

What does all of this mean? How are values trending upward with so little visible activity?  What has been happening behind the scenes?

Many agricultural operators have quietly but aggressively done their best to shore up their balance sheets and tightened their financial belts. Also, over the last 10 years, investors have discreetly gotten involved in the farmland/agricultural market, in a BIG way.

Another contributing factor is the government. The federal government has continued to subsidize the agricultural industry, bolstering this particular sector. 

And last but certainly not least, there is the old money to consider. Owners of neighboring land have been patiently waiting for adjacent property to come to the market, and they have been (and continue to be) poised and ready when it does.

Now the important part, if you’re a farmland owner, what does this mean for YOU?

Simply put, it means that right now there are any number of strong, motivated buyers waiting for land like yours. Land prices have not exploded like other sectors have, but they seem to be trending that way. Of course, there are a variety of factors that would affect your property’s value. Such as location, soil quality, and strength of the local area are the main three that would affect value.

If you would like an idea of what your farm would be worth it today's market, give me a call. I would be happy to chat a bit and see if my service would benefit you & your family!


Brad Neihouser

765 427 5052


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