Investors are apparently rediscovering the value of holding land as an asset, but while that were out of the ag land market, farmers took the opportunity to purchase available land. According to Farmers National Company in the last six months that owner/operator activity kept land values steady despite the soft economy.
Lee Vermeer, AFM, vice president of real estate operations for the company, notes that investors have long played a role in the land market, but in 2008 those buyers retreated from the market. "Investors stepped aside around November, but they have gotten back into the game," Vermeer says.
According to a press statement, as stock market uncertainty and weakness in the economy played a role. But now, as some believe the economy has bottomed out, investors are looking at land as a purchase again.
Vermeer, commenting about farmers buying up land in the downturn, notes that a "good indication of the strength of the land market was that even with all the uncertainty and the stress...land values held." The company is seeing strong buyer interest and reports that some land sales have been at the same price levels recorded in the middle of 2008. In addition, there have been few forced sales, resulting in land being in very stable hands.
The chart below shows selected top land values, as reported by Farmers National Company, as of June 1, 2009.