Yep, same in SE Nebraska. $27,500/acre and the losing bidder was a politician from Lincoln. Herbster.

A lot of farm land or any land was bought with cash over the last couple decades so interest rates were not a major factor for many sales. What higher interest rates do is remove a lot of potential buyers that can not pay the higher prices and use borrowed money. That makes the land prices for the cash buyers lower for them also. Huge range in land prices in our area with needing land to feed dairy cattle and apply manure according to the regs.
Land is for many a long term investment. Land makes a good diversity investment for those that have monies invested. Just buying a 40 at 8k per acre hoping that you will double or triple your investment is a stretch and also one needs a lot of monies to buy the original 40 unlike buying shares of stock or shares of mutual funds. You can start with almost nothing in todays land market that is not the case.

Bryce

No expert either. But out here the 80's were a big deal with interest as high as 18%. Wiped lots of guys off the map. The big guys got bigger of course picking up land from the bank or on the courthouse steps. Many land auctions at the time, quite often the auctions had no sales because they couldn't get the minimum bid. Lots of land changed hands after a no sale auction for 50-75% of the auction minimum. I don't think we're their quite yet, but if drought continues? It could get ugly fast.

A drop in prices will take Mother Nature and a really hard drop in the economy. People that do not have to own land (make a living) would need to make decisions in order to keep up with their standard of living.

They can pay that for land because they cost average all their land, most farms are generational and most farms are passed down. Now if property taxes were based off of value, say one percent, prices would go down.

This is correct. And as far as property taxes that is a whole nother story. Most people do not realize that ag land is already assessed at a much lesser rate than residential or commercial property. Further, assessors base the assessed value off the soil productivity rather than it's actual market value. For example, these farms you here selling for $20,000 an acre are probably only being assessed based on a market value of a few hundred dollars per acre. As such, farmers are really getting a huge break on property taxes. I understand this may be necessary to keep food prices low so I'm not necessarily for or against it. But combined with other government subsidies it does make a non-farmer business owner a bit jealous.

Ol dad

Spot on as always!

Ol dad

Refinance when interest rates drop and then you won't be paying 7% over the course of the loan. I have seen this movie.

you think the people in arizona that are running out of water and ranchers having to sell off cattle is seeing higher prices i wish i would have taken the money i spent on my place 50 years ago and put it in guns i would be very wealthy today and a lot less owner expenses and up keep like i said one day at a time

That is exactly correct but a lot of people who borrow money can't cover the debt service right now with interest rates as high as they are. Two things have to happen either real estate prices come down or interest rates drop. Cash buyers are waiting for deals right now which haven't happened yet. If interest rates don't start to fall you're going to see values declining. Exposure periods are already increasing and list of sale price ratios are starting to widen.

Ol dad

I did tax work and financial planning for farmers for a bit over 30 years. Yes the taxes paid on bare farm land or ag land is extremely low in WI compared to recreational land or other property. This has shifted the taxes to schools, roads, volunteer fire departments, security etc. to home owners and owners of recreational land. I don't know the exact figures now but a person who owns say a wooded 40 for hunting that sells for 3K will pay 2 to 3 times the owner of an ag 40 that sells for 9 K. I think we will see some stabilization or actual drop in land prices arouond our area due to the fact that farmers here are dairy farmers and have huge investments in cattle, buildings, machinery, equipment and feed and manure storage and therefore much more likely to carry considerable debt to be able to own and operate these larger farm businesses.

Bryce

Here I think prices will stay about where they’re at we have a small group of people with a lot of money and are investing in land and they don’t seem to be slowing down and they bid against each other, taxes here are rising like every where else.

North Central WI, Auction and old gent passed his farm land sold for $4250.00 acre that is crazy for our rocky, swampy and but this was pretty good stuff. Still way high by our standards. Buy Dirt God ain't making nay more of it!

Roadside timberland in my area is being harvested , then subdivided and sold for $3000- $5000/ acre. No shortage of city recreationalists who own a snowmobile or ATV. My real estate agent friend , told me, the 1st question asked, is where is the ATV/snowmobile trail ?

We bought lakefront and because the seller at the time was "overwhelmed" by offers in the first 12 hours that the property and house were on the market, the seller adjusted and announced it was "cash buyers only." That cleared the field by 95% we were told. And the bidding began in earnest at that point. For a mere 24 hours before the seller accepted.
People are financing more than they belly up with cash, so these higher interest rates will have an effect as intended.

We baby boomers are where the majority of this nation's wealth resides and cash is king right now.
I'd like to buy some more land around us, but I'll wait a spell.

Some land goes up. Some goes down. And we move to acquire in those conditions.

Blessings,
Mark

I appreciate all the input. At over 5,000 a ace tillable does not make sense here I'm most cases, this ain't Iowa farm ground though some are willing to pay like it is.

If only land was $5,000 per acre in my neighborhood. I would be in hog heaven.

How much will that land cash rent for? $150/acre or higher than 5k is worth it.

Ol dad

Most of its over 5,000 an acre, some far over. We don't have great ground here, lots of gravel and hills with gravel.

Let's say I did find a 40 for $5,000 a acre. Put 33% down and financed $133,333 @ 7% interest over 15 years. $1,200 per month payment for $14,400 per year payment. In 15 years I will have spent $280,000 plus taxes and received $90,000 in land rent, not even enough to cover the interest and taxes.

Now let's say the next 15 years land rent averages $250 a year, that's $150,000 in income over the next 15 years meaning I still would not be broke even.

I would be 70 years old by the time I broke even roughly. Of course the land would be worth more presumably, say $15,000 a acre or $600,000. If I sell the govt is going to take a huge chunk of that and I'll have maybe doubled my money in 30 years. If inflation stays around 2-3% I'll have made around 2% a year.

It has to make cents to make sense and current prices do not make sense, they are speculation