The jury is out on what land prices will do the rest of this year and into next year with falling commodity prices. So far land values at land auctions have been healthy. If land values are going to decrease, the signs aren't obvious yet.
Sources say that a 960-acre farm in Douglas County, Ill., recently sold at auction for $14,535 per acre. The appraised value in June was $11,600 per acre. The entire tract totaled $14 million.
One buyer bought the whole property – an investor. He was identified as Jimmy John Liautaud, the sub sandwich founder. Sources say he grew up in Champaign and has been buying land in central Illinois recently.
Runner-up was a seed corn company who wanted the land for seed production. The company has other holdings in the area. Farmers went to $12,500 before backing off. Nearly 50 bidders were registered for the auction.
Some expected more farmer activity, but don't think what happened with less activity was necessarily linked to what's happening in crop markets. A rumor circulated that the eventual buyer had offered even more than the final selling price before the sale. The rumor was not true, sources say, but it may have affected how serious local farmers got in actually thinking they could buy the property.
Several tracts are going up for auction in Indiana this month as well. You can bid on everything from commercial property in central Indiana to farm land in west-central Indiana. Auction companies continue to announce more upcoming sales on what seems like a regular basis.
By the time the winter is over and these properties have gone up for sale, it may be easier to get a handle on what property values are doing on good land, not-so-good land and development or transitional land. Land that is awaiting development and being farmed in the meantime is generally considered transitional land.