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SW KS, near Dodge City | I'm a lender and I farm.
Land's coming down. Actually, out here I'd say it's already dropped quite a bit in certain instances. Had a piece that sold 3 yrs ago that sold for 2100/acre, no minerals. Recently had an auction that sold similar to better quality ground, about 4 miles closer to an elevator, with the minerals for a little over 1500/acre. An 80 that sold at that same auction that was much better ground than the 2100/acre stuff, brought 1725. There was almost 0 investor interest in those tracts.
A week prior to that auction they sold a 160 acres with 30 acres of grass that brought 2500.... but it had 2 wind turbines on it that paid $9k/yr between the 2. It sold to an investor, and bidders number 2 and 3 were also investors. Not 1 of those bidders even showed up at the auction for the ground that didn't have the wind turbines, and there was probably at most 3 miles of separation between these pieces of ground.
My take away? Investors wanted the guaranteed income stream, plus the "safe haven" of real estate. Take away one of those, and they're not interested.
Now, as a lender, and remember, I might be 1 of 10,000 loan officers that work at institutions that you, your wife, your brother, your mother, or anybody else you know, puts your money in for safe keeping, which value do you want me to use when looking at things? The 2100? The 2500? The 1700? The 1500? | |
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Thoughts on crop land values
