Price of Farmland

[MossRoad]

The patriarch of the family that owns Hoosier Racing Tire just south of South Bend, Indiana passed away a couple years ago. His family auctioned off part of the family agricultural land Wednesday. They auctioned off 525 acres of AG land in 8 tracks for $4.5M to three separate bidders from both in and out of state. That comes out to a tad over $8571/acre.

I bought mine around 1989 for $1500/acre. Yikes! That's over 8.5 times the price in 25 years!

I do not see how it would be possible for a young person to get into farming unless they are born into a family that already owns land. Times they are a changing.

 

[RobertBrown]

There's a bit more to it then that.
Location, location, location.
Real estate is only worth what you can put on it or take off it.

 

[whistlepig]

We sold 6.25 acres of land for $600,000 7 years ago. Because of location.

 

[smstonypoint]

David,

$8571/$1500 = 5.714, not 8.5.

$100 invested 25 years ago would have a value today of $571.40 if had earned a rate of 7.22% with annual compounding.

$100 invested 25 years ago would have a value today of $850 if had earned a rate of 8.94% with annual compounding.

AH -- the magic of compounding.


In what county are the tracts located?

Steve

 

[buickanddeere]

Nothing new. Europe has been like that for centuries.

 

[tcreeley]

When we came here to Maine in 1984, land was 250 an acre. We were leaving behind 20,000/acre in rural Massachusetts.

 

[Blade Breaker]

8-10 thousand per acre is normal here. Good land is selling for 12-17 thousand. We also pay accordingly in property taxes.

'Best of the best' land sold : Mitchell County Press

 

[OldMcDonald]

smstonypoint makes a very valid point that most folks forget - and add in inflation. As a further point can anyone give the pay rates for the same job 25 years ago and now?

Everybody from a non-farming family has always been told it is impossible to buy in. I was, and countless more before and since me. If it is your sole goal you can do it if you are fit for work and find the right woman to go with you.

 

[oosik]

There is Ag land selling right across the county road from my driveway. Zoning on Ag land here requires minimum 20 acre lots. The Ag land here is only good for open range but if its prime bottom land - then maybe alfalfa. Twenty acre chunks go for $40k to $60k depending upon possible use. Taxes on my 80 acres in the mid-50's was $11.00 for the entire 80 acres. Taxes for tax year 2013 - on just the land - was $2200. Still low by most comparison of land in the east but a reflection of demand, availability & location. A lot of people in the big city(Spokane, WA) want to live out here "in the country" because the commute is less than an hour.

Five acre chunks(from early subdivision of old homesteads) - if you can find one - will go for the same as the twenties. At first I didn't realize how truly nice it was to have LARGE cattle ranchers totally surrounding my property. No neighbors due to land subdivision and their needing open range for their cattle. The going rate here - 10-15 acres of open range land per head.

 

[Gary Fowler]

We bought our property for $2250 per acre 5 years ago. An adjoining tract of 11 acres sold for $5500 compared to asking of $7500. Less than half a mile from me is a developer selling 3 acre parcels in an 80 acre tract development for $9500 per acre and has sold several lots but so far no one is building on them. There are a lot of acreage lots going in now in my area. This is prime retirement property with quiet areas, almost no crime and fairly low property taxes (but has a state income tax), most contain at least some wooded areas so prices are jumping up quite a bit in the last few year.