Editor’s note: This is a new column looking at land sales throughout Illinois. Please contact the authors with particular sales or questions.
By Ross Albert and Dale Kellermann
As we work our way through the winter land sales season, we’ve noticed some trends. Chief among them is that land sales values are now even more driven by location. But it doesn’t always make sense. This apparent location influence could have you scratching your head over some land sale results this season. Here are a few examples throughout the state:
Recent sales suggest buyers can be motivated very differently within a very close proximity. Consider these two sales:
• 80 acres; 139 productivity index; Suez Township, Mercer County. The land sold at auction Nov. 10 for $13,800 per acre ($99 per PI point).
• 80 acres; 140 PI; Osco Township, Henry County. The land sold at auction Nov. 19 for $9,150 per acre ($65 per PI point).
These farms sit about 20 miles apart in contiguous counties with similar productivity potential, and both are bare pieces of farmland. They are similar quality but sold for a difference of $4,650 per acre. These price differences are likely associated with the regionally specific demand for with land.
In general, high-quality land is maintaining its value. Farms with blemishes such as odd shape, building sites or waterways have been under more pressure. Take a look at these two farms, handled by our firm:
• 120 acres; 143 PI; Willow Branch Township, Piatt County. Land sold at auction Nov. 7for $9,000 per acre ($63 per PI point).
• Two 80-acre parcels; 140 PI; Dale Township, McLean County. Farms sold at auction Nov. 13 for $13,800 per acre ($98 per PI point).
The two higher sales sit in a highly competitive land market. Multiple neighboring landowners, including the longtime tenant, were particularly motivated to pay a location premium.
These farms are all central Illinois prime class soils with no improvements or major blemishes, but sold for a difference of $4,800 per acre. The farms are in contiguous counties auctioned five days apart.
Tracts of land in southern Illinois can vary greatly by soil types, percent tillable, urban influence, etc. As with northern and central Illinois, the following two auctions show the importance of location:
• 80 acres; 102 PI; 99% tillable; Clinton County. Land sold at auction on Dec. 6 for $7,300 per acre ($74 per PI point).
• 33 acres; 112 PI; 95% tillable; Clinton County. The farm sold at auction Nov. 1 for $13,509 per acre ($127 per PI point).
• At the same auction, 42 acres (located behind the previous 33 acres) sold for $11,668 per acre ($109 per PI point). This was still a very strong sale, but we suspect the lower value was due to a 50-foot-wide lane as its only access.
The two higher sales are in the very strong dairy farm region of mid-Clinton County. The 80-acre tract sits 20 miles east in an area traditionally believed to receive less rainfall.
Clearly, looking back at the 2018-19 winter sales season, location seems to have had an exaggerated effect on the value of the farm. If you were to simply analyze sales based on raw numbers such as productivity index, size and percent tillable, you’d see that trends and tendencies don’t always surface. What defines these recent land sales? Location, location, location.
Albert is a licensed real estate broker with First Mid Ag Services, Bloomington, Ill. Kellermann is a licensed real estate broker with First Illinois Ag Group, O’Fallon, Ill. Email land auction questions and comments to email@example.com or firstname.lastname@example.org.