Land prices for the month of October 2019 trended flat, however there was an increase in sales volume over the previous month. We have nearly tripled the amount of land sold company-wide over the previous month and prices remained stable in every category. In volume of land in specific categories we saw more acres of tillable land trade than timberland, which is due to tract size. The number of timberland vs the number of tillable land sales were very comparable. Land prices for hunting land ranged from $3000-$6000 per acre based on income, building site quality, deer management neighborhood, and state. Timberland is applicable as ”like-kind” real estate from a 1031 exchange perspective; so we did see that purchase method used multiple times exiting other land, commercial, or income producing residential real estate.
In tillable land, we saw ranges from $5000-$11,000/acre; this is again based on quality of CPI or CSR2, water or drainage, field size, rent ability, access, exposure, and geographic location. The prices in Iowa to be higher per quality point than Minnesota or Wisconsin land prices.
The question comes up consistently; “What are land prices doing?” This question obviously has many answers; although the stock market and economy are strong and interest remains low. We are experiencing tough Ag markets and weather in some areas, but the support from non-operator buyers or diversified operators out of farming is keeping the market strong. We have nearly 500 acres scheduled for auction in November and December, and we are expecting the market to be very strong through 4th and 1st quarters.
September 2019’s Farmland Prices mirrored what they did in 2017/2018 especially at auction. Preharvest auctions that are strictly row crop farms can be a gamble, due to a few hot topics from our experience when sold preharvest. Operators are concerned with an early frost, wondering what yields will be, and have yet to harvest any of the inputs they have been putting in the ground all year. Investors are wondering if there will be an influx of sales post-harvest; flooding the market and creating a buying opportunity, so they remained patient with plenty of time before year end.
The data from 2017 and 2018 similarly showed that good farms sold at expected prices from summer sales; primarily to neighboring operators or exchange buyers, however poor-quality farms were very hard to trade at market prices and have a qualified buyer bidding. When sold post-harvest the good farms brought the same or more, and the lower quality tracts had buyers at expected market prices. When timberland or multi-parcel bidding opportunities were added to the mix, they sold even higher especially if hunting rights were given for the current calendar year prior to closing.
Timberland prices for hunting, rural building, and timber investments has remained strong overall. We had a lot of questions regarding diseases affecting land prices and the answer is yes. There are less buyers for land in the areas that are having all the targeted animals removed. Timberland prices are determined by many factors; just like tillable acres, if you are interested in deer hunting and want a quality experience, you must go where the deer are. The negative will always have a positive effect elsewhere, and we have seen that evidence in hunting land prices continuing to be very strong in markets that do not have disease concerns.
We are very excited for the upcoming Hunting and Harvest seasons. Our agents enjoy few things more than having a client take an excellent crop, or world class animal off a property we helped them purchase. If you or someone you know is interested in buying or selling land give one of them a call. They are a wealth of knowledge in their market and happy to help anyway they can.
Farmland Prices for the month of August 2019 showed stability and trending upward. There were many farms sold in every category with many different sales methods utilized. High-quality property continued to bring top dollar while medium to lower quality tracts again were responsible for the stability. In Iowa we saw multiple high-quality farms go over $10,000 per acre, Wisconsin followed with over $7,200, and Minnesota in the high 6’s to low 7’s on the choice tracts. The recreational property followed suit with properties having great quality bringing well over $5,000 per acre in Iowa and Wisconsin and in the $3500-$4000 range in Minnesota. The medium to low quality tracts sold 25-55% lower depending on neighborhood, organic certification, timber quality, building site availability, and scarcity in the markets. One point of major interest is the number of “investor” non-farmer buyers we have seen in the marketplace. With an interest rate decline, big stock market swings, and great rent support we have seen many non-operator or lease back situations taking place. Our buyers on tillable acres were more investor buyers than farmer buyers this month. Hunting land buyers this month were primarily people looking to build in the country, 1031 exchanges, stock market exits, Legacy purchases, and partnerships primarily focusing on whitetail deer hunting. Land as an investment is often overlooked due to it not being very “noisy” in the grand scheme of investment options. Land as an investment not only produces a stable return but offers some unique opportunities that other investments cannot. Land as an investment provides our buyers with security, usability, infrastructure depreciation, appreciation, and cash flow. If you or someone you know is interested in buying or selling land, have them give one of our agents a call. These people are top notch when it comes to answering land questions and most have owned many farms personally over their lives. We wish everyone a safe and prosperous start to harvest and hunting season.
Farmland Prices for the last 5 quarters have reduced overall about 7% during the term in our entire service area of MN, IA and WI. We have seen the high quality tracts hold their value slightly lower than where they were last year at this time. The mid to low quality tracts have slipped bringing down the overall average. Prices have currently stabilized in each category and we have many buyers in the market to purchase land in 2019. Our attention continues to be focused on interest rates, world trade, commodity prices, and weather for timely dry planting. Cropland lease rates have adjusted down an average of 9%.
Hunting & Rec Land Prices for the last 5 quarter term have increased 12% overall. The recreational property has a classification similar to tillable property. The properties of high quality have experienced a higher gain than the average bringing the marginal and low quality up with it. Timber, Hunting land quality, buildable sites, and water sources are some of the many
important topics determining quality. We currently have many buyers in this category as well and this market continues to rise with more interest as the weather improves.
Buyers of Land were 1031 exchange buyers, expanding farmers, recreational use, cash investors or re-entering past land owners, stock market exits, business use buyers, timber investors, and future home site buyers.
Sellers of Land were settling estates, 1031 exchange sellers, business partnerships, relocation due to hunting neighborhood, retiring farmers, geographically consolidating operators, and very few lender forced sales.
Sales Methods: our primary source of sales was traditional listings, follow by live and sealed bid auctions. We also completed a number of off market private sales and were involved in many 1031 exchanges.
We hope you find our annual High Point Land Report beneficial to you or your business. If you have questions regarding the information provided please feel free to contact our office at 507-218-1243 or Sold@hpraa.com
The biggest factor of food plot design is having your food in the right location. This plot is on the south side of the wood edge which makes it very huntable with any predominant north wind. This weekend we knocked down a 40 yard patch to shoot with the bow from an elevated blind and made a path down the middle for 2 reasons. To see the deer coming from across the plot and to funnel them right to the stand. Every deer that came from behind the food plot took that lane right down to us presenting a broadside shot, including this tank of a buck. If you would like to put together a plan for your hunting property let me know. I would love to help you out!
After selling this hunting tract, the buyer asked me what I would do to improve the property. I put this plan together for him, the green areas will be future food plots. The biggest plot to the south will be the late season plot to help hold deer through the winter months. The other two will be early season staging plots to the larger food plot and to the major grain food source to the east. The largest food plot will be planted with brassicas this year and will have brassicas and soy beans next year when he has the growing period needed. The smaller staging plots will be planted with clover and chicory. The red areas marked on the map are where the new owner will go in and cut down some tree tops and add thick cover with old Christmas trees and other things to help make those prime bedding areas. Also, not shown he will add a small watering hole in the wash running through the middle of the property. The property already has great deer and turkey traffic for 20 acres but this should really help pull some big bucks to the property.
Farmland prices for the month of July 2018 were strong for the few sales that took place, however they were very limited in volume. Trade talks in interest rates continue to be hot topics however A quality farms that have come up for sale have achieved very high prices. Tillable land in southeastern Minnesota currently ranges between $5000-$9000 per acre regularly and our buyers are split 50-50 between operators and investors. In Northeast Iowa we are seeing tillable land sell between $5500-$10,000 per acre depending on quality and location. Hunting land in both states has consistently risen with buildable opportunities and high timber prices putting our recreational ground between $3000-$5000 per acre regularly. If you or someone you know is interested in buying or selling a farm give one of our High Point land agents a call to answer your questions. They are a great resource to use to your advantage. Have a wonderful rest of your summer and we look forward to a prosperous third-quarter and a great, safe harvest season ahead.
Are you looking to buy a timber tract or hunting land?
Timber tracts can be quite unique and vary from one to the next, especially in price. Right now we are seeing a range on timber/hunting tracts that go from $2250-$5000+ per acre depending on several things. The main factors that go into the price of the property are if there is a building site, the quality of timber on the property, other income, access (hunting and vehicle), neighborhood, improvements to the property, and proximity to paved roads.
The quality of timber on a property is important to look at when buying a tract. When walking a property look for cut stumps and logging roads to see if the property may have been previously logged. Good trees to look for will have a trunk of at least 24 inches that you cannot get your arms around, that have grown straight for at least the first 15-20 feet with very few branches and knots growing in those 15-20 feet. The species to look out for are Black Walnut, Oaks and Shagbark Hickory, Maple, and Cottonwood to name a few.
When buying a timber tract for hunting you also want to look at the neighborhood you are buying in and keep a few questions in mind. Do they practice QDMA? What deer have been harvested in the area in recent years?What do trail camera pictures show from the area? Is your neighbor 1-3 large land owners or 5-8 small land owners? These questions can help you find the right piece of ground and can also effect the hunting on the tract you are looking at. You also want to look at access to the property. Do you have top access? Do you access from the North or South? In our area we have a predominant North-North West wind so access from the South can help you access your stand locations without being winded by deer that are bedded. Is the access off black top, is it an owned or easement access, is it off gravel, is it gated?
Another factor to look at is if there is an existing approved well, septic or electric. Permanent blinds, ponds or established food plots to help improve the property. These can all add value to the property. There also may be income producing factors on the property like CRP or CREP, WRP, cell phone or radio towers, wind easements and subsurface rights that could produce income.
I hope this article helps you when looking at buying a timber tract, if you have any other questions or are interested in buying a timber tract to hesitate to call me at (507)696-6228 or email me at Lucas@hpraa.com.
RECENTLY SOLD! Here is the highlight video from one of our most recent auctions in Iowa. The auction went extremely well and we had a great turn out. We would like to thank all the people coming out and the Rose family for this great opportunity.
This week I went down to our farm outside of Chatfield, MN. I wanted to walk the property during the spring thaw that we were in the middle of. I know that in late March or early April in MN that spring thaw can go at a moments notice. I went to the farm to plan my yearly activity of spring plantings. Each year I plant a number of trees and native bushes at the farm. I also plant a few food plots as well. What a great morning I had! The pond was almost thawed completely, my native grass stood tall for the winter and the wildlife was very active. I could hear the turkeys gobbling off in the distance, which is reassuring for my up and coming turkey season.
The river that runs through the property was flowing at a good pace, but not rushing this year like some years in the past. As I wondered around the farm I found a deer shed along the river and thought I can’t wait for this fall, I hope to get a chance to meet this big fella.
There are a few reasons I make a plan each year for the farm. I know that if I keep planting habitat the wildlife will continue to populate my farm.
I like to plant a number of different kinds of trees, some for heat units, some for grazing purposes after the nuts become available, and some for making the farm thick with cover. I also like to plant native grass because it grows fast and stands tall through winter nicely. Wildlife love tall grass because it gives plenty of cover and warmth. I cant tell you how many deer have “disappeared” in our tall grass during the fall hunting season, just to reappear an hour later. It has really become a great addition to our farm.
Let me know if you have any questions about my “plan” for the spring planting season.
There are many factors to consider when deciding if a land auction or traditional listing is the best choice to sell your real estate. The questions we start with before we get into the pros and cons of each sales process are;
1) Is this property going to be sought after by more than one person?
2) Does it currently have an established value? and
3) Does the seller have time to wait?
“A real estate auction can be a very lucrative sales process when executed properly”; says Jacob Hart, Land Auctioneer with High Point Realty and Auction in Decorah, IA. “We often sell property at a much higher price at auction than we would ever traditionally list it at”, says Hart.
The auction process starts with the property being marketed with the seller’s terms established so buyers can set the price based on those terms. Many times, this is easier and favored by buyers due to the level playing field and ease of a take it or leave it transaction without complicating things. When the auction marketing starts the date and location are set for the sale, terms published, and all interested buyers are sent a very nice package of pertinent information. The auction may be a sealed bid, private or public sale depending on what process is best suited for the property and seller’s intentions. When auction day arrives, we start at the opening bid and go up from there.
On traditional listings sellers start with an asking price set at the market value and typically sell there or offers come in below. Land real estate is a very in-depth market and the farms we sell often times have not been sold for many generations. Attempting to put a listing price tag on something that has not been available most times in any buyer or sellers lifetime is a hard thing to do.
An auction also allows the seller to have a definite date when they will have the property sold to move on. An average sale is scheduled 45-60 days out and closes 30 days after the auction. This gives sellers a schedule for planning their next move and may save them taxes, interest, and maintenance at the same time verse waiting 6 plus months to sell their property.
A land auction verse traditional land listing has many benefits for the right property or owner’s situation. If you have questions about a land auction as a sales method for your property. Give one of our offices or land agents a call. They would be happy to give you their honest knowledge about which sales process may be the best to sell your property.
Did you know an IRS Code 1031 Exchange can be used to purchase land?
Land is an income producing piece of real estate in most cases. If you have an apartment complex, rental property, or commercial property that has increased in value it may be a great opportunity to sell and exchange tax deferred into a hunting farm or tillable land investment. The exchange between commercial income producing property and land can be the same, as they can both be viewed as “income producing, non homestead, Real Estate.” Well what about land that doesn’t have any income through buildings, CRP or tillable acres you might ask. Land that doesn’t have any income today may very well have long term income opportunities in timber or other sources and the property doesn’t have to necessarily be income producing at the time to be exchangeable. The 1031 Exchange has long been one of the best opportunities to buy and sell Real Estate tax deferred and the real estate that you own can be enjoyed in many different ways, whether you get enjoyment from fixing a broken pipe or having to hang that darn deer stand is a choice you will have to make for yourself!
The first thing you need to do is locate a gobbler. That means either roosting them the night before, finding them roosted first thing in the morning or finding them in their strut zones glassing. Either way, once you have found them I like to get as close to them as I can before I start calling. It makes it a lot easier to convince a longbeard to commit and come to your calls if you are nearby.
The biggest key to success while turkey hunting is always being mobile. One of the best assets I have in the turkey woods is a good turkey pack. It allows you to set up in seconds with or without a tree while being comfortable and in great shooting position. If you are set up on a tom but they are being stubborn. Don’t be afraid to be quiet for 15-20 minutes and then make a move on them to get closer, or just to add some movement to your call. Even if you move away from the turkey you can still add that movement and end up pulling those stubborn birds in for a shot. If you can’t get that turkey to commit that day, leave them be and don’t push them too much. If you have the luxury of hunting a large tract of land or other property, let that turkey be and go try and find another one that is more active and use that bird as an option another day when he’s feeling more aggressive or possibly not hen’d up.
Don’t Over Call
Once you get the longbeard to start responding to your calls and you hear him getting closer, ease up on your calling. The worst thing you can do is over call. The turkey will be much more likely to hang up out of range and make you (the hen) come to him. Once I know the tom is committed to coming I quit calling, even when he continues to gobble I will rarely call back to make him come looking.
Enjoy the Moment
Once the longbeard is in your effective range, then it’s time to hit him hard with the calls if you can. There is nothing I love more than to get a turkey hammering at 10-20 yards in your face. As long as he’s being calm I like to sit back and enjoy the show they put on. Once you can’t take it any more its time to click the safety off or clip on your release, take aim and take him!
I hope that this quick read will help you this turkey season!
Located in Mower County, Minnesota, this 160 acre parcel is the classic flat, black and square tillable tract. The property has CPI’s in the mid 80’s, drains well and features patterned tile throughout the entirety. The property is located just a few minutes southeast of Blooming Prairie and is located just off of a blacktop road with an access road that goes to the middle of the property for easy access. The property is currently not rented out and is farmed by the owners.
Come on down to Forestville State Park at 5:30 tonight for a field day. We will be learning about “Using Fire for Vegetation Management” which will include topics like comparing a regularly burned woodland with one that has not, evaluating the benefits burning has on local wildlife, and creating a firebreak and understand the permitting process. There will be a light supper served before hand as well!