(Griswold) A piece of bare farmland land located near Griswold brought a record setting price last week.
Steve Bergren, of Bergren Real Estate and Auction, of Griswold, sold a 156-taxable acre, 152.4 cropland acre, 85 CSR ridge farm southeast of Griswold for $13,500.00 an acre.
“This is just as good a farm as you would find anywhere in the United States or Iowa for sure,” stated Bergren, who admits the farmland market remains very strong, but the price of this one surprised him and many others.
“I’ll tell you what…we had a good farm machinery auction a couple of weeks ago too, and anything that is good today is awfully hard to appraise until you sell it, honestly,” said Bergren. “This farm could have appraised for $11,000 to $12,000, but the price really surprised me and everyone else.”
Bergren cites low level interest rates, and high grain prices for the continued strength in the market. And he says there is still a lot of money left over from last year. And the drought doesn’t seem to be a factor, at least this year. So the million dollar question is how long will land values continue to climb.
“You know we thought two or three years ago we hit the peak, but it continues to creep up 20-percent or more a year,” said Bergren, adding a warning. “Everything has a top to it…it can’t keep going up forever.”
Meanwhile, not all farmland is bringing that price. On that same day, Bergren sold the high dollar farm; he auctioned off an unimproved hill farm with no-terraces, no tile and some wasteland for $6,000.00 an acre.
Bergren has a lot of farmland listings coming up for sale in October. One reason for the increased seller inventory maybe to beat the possible change in the Capital Gains rate that are expected to go into effect in 2013.
And who is buying this high priced dirt? Bergren says he has sold 6 farms in the last couple of weeks all going to farmers but one, which was purchased by an investor.
September 11, 2012