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Real Estate Market Returning to “Normal”? Latest Market Analysis and Trends

Tanner Knowlton – Iowa Associate General Appraiser and Iowa Land Agent gives his expert opinion:

We first want to start by expressing our gratitude for the exceptional year of business we have had in 2023. It has been a remarkable year filled with achievements and growth, and we extend our heartfelt appreciation to all our valued clients and partners. As we start the new year, it becomes apparent that the real estate market is showing signs of reverting to a more typical state. However, it is important to note that the term “normal” is relative, particularly when considering the extraordinary years of ’21 and ’22, which witnessed an unprecedented increase in acre volume and record-breaking prices per acre.

Looking at the market performance in 2023, there was a noticeable decrease in the volume of land transactions, as well as a decline in the number of acres sold at auction. Despite these changes, the values of land managed to maintain stability or even exhibit a slight upward trend over the course of the year. Recreational ground and top-notch farmland of the highest grade, known as “A” quality, experienced the most substantial surge in land values. Conversely, there was a noticeable decline in the value of farmland rated as “C” quality and below, which persisted throughout the year 2023.

Despite facing intense drought conditions in all service areas, operators were able to conclude the year on a positive note. The intensity of the drought posed challenges, but the better-than-anticipated harvests provided unexpectedly higher yields. However, there is a ray of hope as interest rates are projected to decrease during that time. On the other hand, landowners can find reassurance in the strength of their high land equity, which continues to be a favorable aspect for them.

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What Are Land Prices Doing?

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.
-High Point
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Land Auction vs Listing?

Land Auction vs Listing?

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.

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