Land prices?

Anyone pay close attention to land prices lately? Curious if interest rate hikes etc had taken a toll at all yet? If I keep booking work I would like to buy more land soon.

Near where I live land prices have been very high compared to production capability for about 7-8 years. The reasons for fewer sales right now is not interest rates it is worry and concern about the commodity price structure over the next years. There is concern that input costs don't trend back near as much as prices do when the bubbles break. This is mostly the concern of lenders and other financial interested firms.
Interest rates even if they go up will be still historically low so that to many is not an issue as some may think it is. Long term interest rates are not nearly as impacted by rate increases are are the short term or operating loans that businesses use to produce and operate and that impacts all businesses. The other main reason I don't feel we will see a lot of decrease in prices for land is a lot of investors are moving out of the securities markets and into other investments and that brings a lot of cash and liquidity into the land market. Many recent sales near us, not big acres say `160 or less have been cash sales so interest rates are not issues there at all.

Bryce

Land price is not a cut and dried issue.

I just had an offer made on my property in Maple Grove. The guy spent over four weeks working up a price based upon the development potential. My neighbor with the same amount of acreage also got an offer. One offer 50% of the other.

it all depends....

You want land? 155 acres, 70 acres still in virgin woodland. 40 acres in mature pines. 15 acres of prime pasture fenced with 5 strand high tensile fencing. 20 acres in hay feilds. 3 ponds. Two spring fed ponds and 1 fresh water prawn pond. 1500 square foot house built in 2000. 900 square foot shop with central heat and cooling. Lean to type tractor shed 24x36. 2 container storage sheds 40 foot long. 5 carports 24 x 24.
Comes with 3 tractors less than 6 years old. 45 hp, 55 hp, and 100 hp with cab, front end loader, with all of the equipment.
In the country but 5 minutes from town. Wildlife galore.
1.2 million. 200,000 below appraised value.

bblwi pretty well summed it up.

Thanks for the input all. I really want a piece a neighbor owns that connects to my farm. Everything here is unaffordium, I was hoping it may be Trending down.

I agree 100%.

If you want land that connects to yours, figure out a way to get it.
Usually only one chance at it in your lifetime.

Crazy here. Just had 225 acres sell north of me for $16,300 an acre.

All good comments. The smaller the acreage, the more it costs per acre. Sometimes it's easier to buy a larger acreage, keep what you want and sell off the rest - if you have the resources to do so.

I thought v had I had a deal with a neighbor friend to buy the ground that was between us and split it up between us. They got greedy in the end and keep it all. We are no longer friends. Their loss my gain now I know what type of people they are and spen my very limited time on.my farm and family not doing projects for them.

It was worth
More to me but they wanted am extra 250k above what we were taking about to begin with for.my section.above what they paid.

I will never be able to afford to expand here now. Buy it at what ever cost if you can afford it because it won't be available again most Likely.

The way to buy land in todays market is to buy land that is not for sale

I have looked for over a year for our first piece of property. Quickly learned that any land that was "for sale" through a realtor would be priced into oblivion

Started writing letters to landowners that lived far off and talking to older folks around town

Found a small track that the guy wanted tax value for. He had some health trouble and had to do a spell in the hospital. Needs some money to pay his bills. Wanted a quick sale and no hassle of realtors and their fees. $7,000 per acre. Got it to pass a perc test and waiting for the survey to finish now. Hopefully will have it closed by the end of the month

All other similar land in my area is selling for 20-30k per acre every day

The piece I want is 60 acres, about half tillage and half potholes of swamp with trees. 3000 an acre may be realistic, I'm not sure though. From a pure financial standpoint it wouldn't make sense.

$3,000 per acre is a steal in my neighborhood.

If you are going to get a loan you could offer $2500 and he carries the note. You could show how much per acre he will really get when the interest is factored in.

Looking at land in Canada just crazy in wy unless your rich there is no way to pay off land on grazing or farming. Land is better than gold. been in Wyoming all most 80 years and scraped a living off the land cant do it anymore.

Heck, you could quadruple it and it would still be a steal.
Found this, not sure how accurate it is.

If I could find any piece of ground for 3k in my area I would sell my children to get it. jk. 30k is more likely here --- I can't pay for that ground raising sheep - even at todays prices. If it bordered my place it would be worth more than market price. If you can justify it - by all means go for it. If it will put you under --- don't.

I meant 3,000 may be a realistic price I would pay. It's not for sale but they no longer farm it and just lease it out. It's poor farm ground and the small ponds/swamps all over in it make it more difficult to farm. As much as I want to go talk to the owner about it financially it only pencils out if I could get it for $135,000. That would make it a roughly 2% return per year with land rent.

The reason I'm considering this is because I'm unsure if I should buy equipment this year and expand my business when it looks like we are coming into a recession, I also will have some profits that I would rather buy land with than pay taxes on so... Who knows what to do. It would basically be recreational land and for $180,000 you can buy a huge chunk of that a few hours drive away from here. (probably 200 acres)

offer 20-50 more per acre and lease it for you. Gives you the opportunity to find out more about the ground and (in our area at least) usually gives you first option to buy. I am in the same boat of trying to expand -- but unsure if I can hold onto it and make it pay. BTW -- a few hours away has costs associated with it too -- I know that for me if it isn't within about an hours drive - i will never use it. If it is close and I might be able to get some return on my investment -- It might be worth it.

don't hurt to go ask. just make a fair offer and see what they say

I would double check with an accountant regarding your thoughts on saving taxes by investing in land. Land is not a depreciable item and the only tax savings you get from investing in land would be the interest on the mortgage, conservation impovements and taxes paid on the land. If you want to save taxes invest in equipment and claim rapid, moderate or slower depreciation depending upon your desire to cut taxes short or longer term. If you don't want to invest in more business equipment due to a recession then investing in land does not make business or tax saving sense either. If you want the land for long term returns, growth and as a working investment then do that. If we go into a recession with higher interest rates the land may not go up much or may even drop. Around here our lenders are requiring a pretty hefty down payment on larger land purchases so their risks are not as high either. As stated above. In our area 60 acres with roughly half lower producing tillable land and swampy woods with ponds typically list for 4-6K per acre. I don't know what they actually sell for.Every piece of land has a different value for a whole host of reasons.

Bryce

Can he not came the land if he is using it for parking his equipment and dumping his tree trimming wast? Business can clam buying a building cat they?

Yes you can claim a building and the rate or speed of the depreciation depends upon the classification or usage of the building as to years to depreciate. Land no. If you buy an two acres and pave it as a parking lot you can claim all the paved, stripping etc. as expenses but not the original land purchase other than taxes and interest etc. If he is storing equipment on bare ground or dumping tree waste, sawdust etc. on bare or open ground then he can not claim that land as a depreciable expense. Land is considered a capital investment and not taxable, improvements to the land may be deductible and at variable amounts and rates. You buy 80 acres and create a fenced hunting area. All the fencing, trails, towers, feeders, animals for harvest, advertising etc. are deductible but not the original land purchase. Let's say you buy the 80 after it has been made into a hunting preserve. Now you must establish a FMV for the land and separate that from the total purchase price and then establish depreciation schedules for the depreciable portion, but not the land. Also when and if you claim depreciation on items you need to include the claimed depreciation on the sale price and pay any and all taxes due on the claimed depreciation. Not a good idea to keep poor records when working to save taxes and not having the records to support claims etc.

Bryce

Thanks Bryce. I was thinking there was some reason I could not remember claiming my farm purchase other than I bought it a few years before I started claiming farm income and b expenses.

It's accurate for Virginia. Can't speak for other states.

Where in MN are you looking to buy? There has been better deals for those with cash in hand, as of lately.

I appreciate it. I need a new account/financial advisor, mine doesn't get back to me anymore very quickly. I'm looking west of st cloud, kimball area roughly.

That is building lots and lake front property included
Here is farm land Tillable/ pasture




sorry so small here's the link. Page five Big difference in farm land only versus ALL land per state

https://www.nass.usda.gov/Publications/Todays_Reports/reports/land0821.pdf

Thank you, jbyrd63.