The land market is hot. With few properties available and cash-flush Americans in a buying mood, landowners are cashing in on record-high prices for farmland and recreational properties.

Joe Gizdic has been in the real estate business for 10 years and admits he’s seen nothing like the current land market. “The mortgage market is still strong,” he explains. “There's still lack of a lot of inventory around. A lot of sellers are kind of holding stuff close to their chest. There are plenty of buyers out there who are pretty active, looking for property.”

The Ranch & Farm Auctions director says he’s been amazed at the amount of money in the marketplace. “People think everybody went broke because of COVID,” Gizdic says. “Well, we haven't seen it as a company.”

Actually, he is seeing an uptick in the number of people looking for farms and recreational properties. “These are a hot commodity,” Gizdic says. “Tillable acres are always hot. These types of properties rarely come available, and with commodity prices still on a pretty good upward swing, and interest rates really low, it all adds to a hunger for tillable land.”

Price for growing crops

In March, another real estate company, United Country Real Estate, posted sale results of 242.2 acres that sold in two tracts in Missouri’s Monroe County.

The first tract was 122.3 acres and included 103.2 acres of tillable cropland. It sold for $6,000 per acre. The second tract was 119.9 acres with 114.07 acres tillable. It sold for $7,150 per acre. The total farm sale: $1.591 million.

LAKE LIFE: Many recreational buyers looking for tracts with lakes or hunting ground will drive prices higher for surrounding farmland.

Gizdic says Ranch & Farm Auctions, which is part of Whitetail Properties Real Estate, like others, is setting records every month. Despite these higher prices, he says it is “always a good time to buy income-producing land.” He points back to the fact that these family farms don’t often become available. “Many of these properties only come up once in a lifetime,” he says.

A case in point is a 2,350-acre tract in Pike County just north of Clarksville, Mo. “This has been corporately owned since the 1960s,” Gizdic explains. “Nobody had access to it, so it is a unique piece.”

It has 700 acres of tillable land, 100 acres of grass or hay ground, 20 ponds, and the remaining acreage is recreational land.

To find the greatest values, parcels such as this one need to be divided. “You have a small number of buyers who can purchase 2,350 acres in one chunk,” Gizdic says. He is breaking it up in to 10 tracts based on land use for the Sept. 9 auction. This approach allows both the sellers and the buyers to achieve their end goals.

Meet the buyers

The buyer landscape shifted because of COVID-19, with many individuals looking for a place to perhaps not make a permanent move but escape the city for a while.

Gizdic sets up listings to appeal to hunters, fishermen and other outdoors enthusiasts. He adds that the Pike County property is one that offers “scenic sites for those wishing to build a lodge, home or cabin away from their busy lives.”

COUNTRY LIVING: COVID-19 made many urban dwellers rethink their living arrangements. Many jobs are now remote. The combination is making small “hobby farms” attractive to consumers who are flush with cash.

He admits these types of buyers can drive up farmland prices, especially if it is not a 100% tillable tract. “If it is a farm that is 50-50 or 30-70, where 30% is recreational and 70% is tillable, then the recreational buyer is interested and can drive the price higher than perhaps a producer, a farmer can justify.”

Future of land prices

Just how long this uptick in land values will last depends on the next 18 months.

Gizdic says there will likely be an influx in land inventory coming on the market over the next year and a half. “When these pieces come available, they may drive down the price,” he says. Still, he holds fast to the fact that buying farmland is always a good investment.

“There are pieces, like this Pike County piece, that are definitely unique,” Gizdic says. “It hasn’t been offered to the marketplace for several decades. This is the first time to buy the tillable acres and add to an individual’s farm. Once in another family, it will likely not come around again.”