Almost weekly updates come from Farm Management and Real Estate Auction Companies about upcoming sales. And the land they're selling isn't just in Indiana. Brochures on the county of a local Farm Credit Services office in central Indiana this week touted a big upcoming sale in three central Indiana counties. But right next to it, another brochure touted the sale of two properties in southern Georgia.
Why are some people letting go of farm real estate this fall? One independent land broker speculates it may be because some want to act before new, stiffer capital gains taxes take effect next year. It also doesn't hurt that there is pent-up demand still for land, this person notes. He observes that there are still a large number of people looking for land to buy for various reasons, even though some land is breaking loose and up for sale right now.
Land prices from sales reported so far continue to hold strong, continuing the trend picked up in the Purdue University land and rent survey in mid-summer. Most of the land offered for sale is sold in tracts. And even if the buyers are all farmers, breaking it up allows more farmers to take on a chunk they can pay for more easily.
The summer survey by ag economists showed a 3.5% increase in top quality land from a year earlier. Most of those surveyed were bankers and farm managers. Average land was up 2.3%, and even poor land was up 1.9% statewide. There were differences in certain areas of the state, but overall prices were up from 1009 to mid-2010.
Interestingly, the summer survey asked the participants to project the trend for prices into December 2010. Remember at the time rains were still prevalent, and the late summer drought that has contributed to a sharp rise in commodity prices had not yet kicked in. Projections were for top land and average land to decline 0.3% from June to December, and poor quality land to decline by 0.1%.
It would be interesting if that survey was conducted today. Results published by real estate companies of actual sales and reported by independents indicate strength and do not indicate any kind of decline in land values in Indiana so far this fall. The fall is rapidly closing in on December.