I fielded several calls this morning, including a few from other Realtors. Every call went a little like this. “Dennis, when’s the last time you’ve seen the land market like this, and do you have any pocket listings or anything new coming soon?”
This truly is an unprecedented market with many Missouri farms snatched-up before the ink dries on the listing agreement. Several of our most recent listings have been multiple offer scenarios, meaning the seller is choosing from more than one offer received simultaneously.
If you’ve been on the fence, trying to decide if it’s the right time to sell, I recommend giving it serious consideration. The scale is tipped in your favor and you might be surprised what your land is worth.
Here are a few of my thoughts regarding why the market is hot, mostly based on feedback from my customers.
- Seasoned land buyers, “the old timers” I call them, remain just as aggressive as always, consistently looking to execute a 1031 exchange or spot a good opportunity. This group has lots of cash and assets, and like large tracts.
- Local buyers have become very aggressive. For the past 12-years, the largest pool of buyers has been the investor. However in the past 6-months, we’ve seen local buyers and farmers purchasing more land in their counties. This is creating a competitive market. VERY COMPETITIVE.
- There’s money shifting out to the stock market and into land. Investors are seeking security. Large portfolio managers, farm managers, and trustees have been tasked with spotting solid investments but are struggling to locate farms that check all the boxes.
- There’s a new segment of land investors, most having never purchased land in their lifetime. This educated group of young adults represents a large portion of inquiries. Most tell me they just want something they can leave to their kids. Most have significant savings for down payment.
- COVID has turned things upside down making an already strong hunting property market even stronger. Folks in the city want to own a place to go on the weekends, rather than a traditional vacation. Small hunting tracts remain super-hot. Additional, COVID has folks moving to rural areas. Homes on small acreages are fetching top dollar.
- Commodity prices remain strong which helps the local pool of farmer/buyers.
- Cash rent prices are strong which helps the investors.
- Interest rates are at a record low which helps everybody.
- There’s uncertainty surrounding the tax deferred 1031 exchange and what the future holds. Impossible to predict but if this program is eliminated, it could have a significant impact on investors. For this reason, some investors are seeking to execute exchanges, and move up to larger parcels as soon as possible.
- Uncertainty also surrounds the future of the inheritance Step Up Basis benefit. If you’ve inherited a farm, in the past few years, this could be a motivating factor for selling.
- Missouri land is in demand. Land investors from all over the country have discovered our low tax rates and they’re all using the Internet to search our local counties. Thousands of them.
- There are great government guaranteed loan programs available for beginning farmers to buy land. These young folks are willing to jump through all the hoops, and it’s paying off for them, they’re getting farms bought.
In summery, the buyer pool continues to grow, and I don’t see this ending anytime soon. As always, if you have a farm you’d consider selling, I’d appreciate the opportunity to share with you my targeting marketing plan, developed to achieve top dollar for you property.