Both Home Prices and Land Values “Red Hot”
OMAHA, NE – What’s that blinking red light next to the For Sale sign on the house next door? According to a recent story from NPR, the increase in home prices on a national basis is sounding an alarm as home prices are up 10 percent in just one year and at a level not seen in the past 50 years.
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It’s not just in home sales, according to Farmers National Company, the nation’s leading agricultural landowner services company, interest in purchasing agricultural land has grown since a coronavirus pandemic-induced slowdown blanketed the land market last spring.
With farmers feeling more financially secure as very strong commodity prices arrived on top of large government payments last year, it is propelling potential landowners to bid more aggressively for additional land.
Currently, farmland sales prices are between 5 and 15 percent higher this year as competitive bidding among interested buyers is pushing land prices to these levels.
Individual investors, both first-time, and experienced buyers, are stepping into the land market as they search for a safe, long-term real estate investment in a low-interest rate environment but investor-buyers seldom outbid farmers for a good land without a 1031 tax-deferred exchange fund they need to convert quickly.
The increase in ag land prices is primarily in the Grain Belt, but nationwide the demand is outstripping the supply for good farmland.
(SOURCE: All Ag News)