The housing market may be slowing down in pockets, but don’t tell that to local and national Realtors who deal in farmland.
This Bloomberg story by former Eagle reporter Alan Bjerga illustrates how farmland values are skyrocketing. Rising crop prices are driving up the value of real estate.
And if you talk to local Realtors, you hear the same story, with a twist: Crop prices and the growing demand for recreational land are driving up rural land prices.
Look for an update on the local farmland market later this week in the Eagle.
One Comment
Three methods of appraising the value of property are 1) cost approach (land + improvements), 2) sales comparisons and 3) income capitalization.
Obviously as the potential income rises from a piece of agricultural property, the value based on income capitalization for that property is going to rise accordingly.
However, beware of the 1929 effect that might be just over the horizon. Or the game of musical chairs … if you are a buyer, don’t get left without a chair to sit in.