Land prices leave farmers in a lurch 18 July 2007 By Sue Kirchhoff, USA TODAY SUTHERLAND, Neb.
Land's 'a bit like gold'
The Midwest is seeing some of the largest land price increases in recent months, but in the past several years the trend has been pronounced in other areas.
Rural real estate prices in Nevada and Montana — a measure that includes farm- and ranchland and buildings — rose about 50% from 2005-2006, and were up more than 35% in Florida, the USDA says.
In Bozeman, Mont., David Johnson, a real estate broker for rural real estate marketing and management firm Hall and Hall, says out-of-state buyers have been snapping up land for scenic and recreational value. Residential land prices have also doubled or tripled.
"The buyers for the ranches are people buying as a second home," Johnson says. "We're driven by luxury, recreation, fishing and access to the national parks."
So much outside money is sloshing around that remote spreads in parts of eastern Montana — where even the early homesteaders couldn't make a go of it — now sell for millions of dollars.
"Land has appeal because it's tangible, it's a bit like gold in that regard: No matter what happens with the Dow, the land is there," says Jerry Warner, executive vice president of Farmers National in Omaha, the nation's largest employee-owned land-management and agricultural-services firm.
"There's just a huge amount of cash in this country. … We clearly are seeing more investors than we've seen for some time. They are then competing against each other, and that makes for an interesting market," Warner says.
One example: Media magnate Ted Turner last month bought more than 26,000 acres of Nebraska ranchland for about $10 million. Turner, a major landholder in several states, already owns more than 398,000 acres in the Sandhills area of Nebraska and southern South Dakota, according to the North Platte Bulletin.
In states such as Florida, California and New Mexico, land prices had been propelled by a booming housing market. With the housing sector now in the doldrums, land appreciation in those states appears to have slowed or even fallen in recent months.
"I have land for sale. Probably in 2005 I would have sold it in a week, and today I can't sell it, but the listers won't come off their selling prices," says Randy Edwards, accredited rural appraiser and president of the California chapter of the American Society of Farm Managers and Rural Appraisers.
