The ag situation has changed dramatically over the last 18 months. In August 2020, we faced drought, low commodity prices, and the consequences of the pandemic. We anticipated properties for sale due to debt, operators retiring, and the uncertainty of the upcoming election. Fast forward to now. The ag economy has greatly improved with higher commodity prices, increased export trade, lower interest rates, and a massive influx of government support money. So has the land market.
When commodity prices improve, everyone’s attitude changes. Landlords receive higher rents, owner/operators see improved cash flows, and overall fewer people want to retire or sell – resulting in a reduced amount of land for sale. At the same time, buyers desire to take advantage of lower interest rates, expand their operations, employ a hedge against inflation and invest in an alternative to the stock market. These factors – combined with a limited number of properties for sale – have created strong buyer demand and a perfect storm for a seller’s market with increasing land values. This current trend is reminiscent of the land market from 2010-2014 (see graph).
With every cycle the following questions should be considered:
- How long will the improved commodity prices, increasing land values, and lower interest rates last?
- Are we out of the drought cycle?
- In the current political climate, what will happen with capital gains, death tax, and income tax?
- How much do increases in fertilizer, chemical, and seed prices affect the bottom dollar?
When selling land, the variables are when and if to sell. Some have no choice of when to sell. Others have the choice of when and if they sell. I know many would like to sell, but there is no alternative investment to earn them a comparable return, and they are also leery of the potential tax changes. If you are considering selling, is it better to do so with the values on the way up rather than trying to predict the top, missing it, and selling on the way down? The situation can change in a heartbeat.
If and when you sell your land, you have one chance to do it right. And it starts with picking the right real estate company. You’ve probably been receiving postcards from other real estate companies saying they have buyers for your property. All real estate brokers claim to have buyers, but you have to ask yourself – who gets results, and who can I trust to handle the details correctly? In the last 12 months, we have sold over 85,000 acres for nearly $89,000,000. These sales have included two large ranches (24,000 acres and 11,000 acres), 27,600+ acres of grassland in varying parcel sizes, over 6,900 acres of pivot irrigated ground, and the balance of about 10,700 acres of smaller parcels, dryland, CRP, and rural acreages. In total, Reck Agri Realty & Auction has closed over 1,759 transactions on 820,846 acres for over $650 million total.
We’ve experienced about every situation and can handle any size and type of transaction. Our goal is to get you top dollar via our aggressive marketing, access to our buyer database, and your choice of a private treaty or live and online-only auction bidding platforms. We have the experience, negotiation skills, relationships, and connections with lenders, attorneys, CPAs, FSA, and title companies to offer a seamless transaction. Take advantage of the high demand for land. When you’re ready to sell, we’re ready to listen.
We’ve experienced about every situation and can handle any size and type of transaction.