how high will Western Kansas land prices go?
Posted by Super Admin on Tuesday, November 9th, 2010 at 10:05am.
The topic on everyone's mind in agriculture around the rich crop producing lands of Western Kansas is how high will land prices go and will the market continue it's climb upward. Land prices in Kansas continue to increase and have enjoyed appreciation of nearly seven percent according to a recent article in The Progressive Farmer by Victoria G. Myers.
Perhaps the perfect introduction to this topic is also taken from this same article. Victoria states,
"The federal deficit is ballooning, the housing market is teetering on another trip to the basement, unemployment lines keep getting longer, taxes are poised to climb, and the stock market seems a little schizophrenic. In the midst of all this frenetic noise, the agriculturalland market keeps quietly moving ahead."
It's incredible and totally believable that the good consevative values of the people of Western Kansas are also keeping their land values strong. While some have played in stocks, some in homes the farmers of Kansas are steadily increasing their land holdings improving their asset bases and raising the crops to feed our nation. This is nothing new to the heartland, and neither is the ever-increasing value of land. What's been surprising is how well values have grown while everything else seems a bit, desperate. In 2010 alone Faulkner Real Estate has contracted over 20,000 acres of land in Western Kansas, Eastern Colorado and the Oklahoma Panhandle and experienced increasing values all along the way.
My father Mark Faulkner and I have talked often in recent years about the increased number of acres of CRP coming back into production, and up for sale, and how this will effect land values. Included more recently in this discussion is not so much how it will affect values, values are staying strong, but more about how long will the market continue to climb. Also, how long before we have too much land avaliable and reach the market saturation point. In the last few months of 2010 we have completed record setting after record setting sale of CRP ground, dryland farm ground and especially good irrigated farm land. We've also experience record numbers of acres for sale. As noted in Victoria's article land seems to be one of the only sure things for investors right now. Surprisingly, investors are not the ones buying most of the land. However, they are helping keep values strong. Keith Carlson, president of United Farm and Ranch Management out of Lincoln, Nebraska confirms this in the areticle stating:
"...the big interest in cropland is being driven by the fact that land continues to be the only place where investors can always seem to count on a gain. Land just looks safe, especially compared to the stock market.
Carlson goes on to say that while most sales are going to adjoining farmers, investors are helping run up prices. This phenomenon, if you will, is playing out weekly in Western Kansas and we have experienced this in several of our recent sales. Last week a half section (320 acres) of CRP grass with one more year on the contract sold for over nine hundred dollars per acre! This is by far the highest price seen per acre of CRP in that area of Stanton County, Kansas.
So how high will land values go? I'm not quite sure. What I do know is that history paints a nice picture for land values in the long run. I'll leave you with one final thought from Victoria's artice from Stephen Stephens a senior vice president of appraisal with Farm Credit of Southwest Kansas. Stephens says this is a "period of great volatility for grain prices. No one knows for sure what is going to happen in the next twelve months. The world is just moving too fast to try to guess."
Please feel free to contact myself Chris Faulkner or my father Mark should you have questions about land in Western Kansas. Also, you can find out about all Western Kansas land and minerals for sale at our website.
Chris Faulkner is a REALTOR working Faulkner Real Estate in Ulysses, Kansas. He specialized in the marketing of agricultuarl property all over Western Kansas, Eastern Colorado and the Oklahoma Panhandle. Faulkner Real Estate specializes in land sales using their very own Private Auction sales method.