Farmland sales in Far West markets continue to rise
Rising commodity prices and scarce land for sale are pushing farmland values to record levels in the Far West regions, according to economists and land appraisers.
And according to the numbers, all properties are in demand. Investors are buying for a variety of reasons, whether it be to grow new crops, build second homes, or expand farms.
Recently, two large parcels of land in west Fresno County sold for between $8,000 and $10,000 an acre, about double what land in that area was selling for a year ago. In California, the average price for farmland rose about 4 percent to $7,200 an acre in 2012, the highest price ever.
And while investors are eager to buy up properties, economic uncertainty had some property owners rushing to sell in 2012. This was evident in the last three months of the year, according to an article by Farmers National Company. Overall for 2012, Farmers National Company reports that sales activity was up by 40 percent, compared to 2011.
“We anticipated another record year in 2012, but what we’ve seen has exceeded our expectations,” said Derrick Volchoff, ALC, vice president of real estate operations at Farmers National Company.
Projected changes in tax laws prompted many landowners who were planning to sell in the next two years to act before any new rules took effect. According to Volchoff, this high level of activity could lead to a short supply of available land in 2013, driving values even higher.
Despite the widespread drought, real estate market values in the Far West region have remained strong.
Whether it is a farmer or rancher looking to expand, or an investment buyer looking for a multiuse property, good properties are moving.
Land continues to be a safe investment, and buyers are looking to move stock market money into something more tangible, according to Pete Nevin with FarWest R&C Sales/Mgt. Co. in Reno, NV. According to Nevin, properties in Nevada and California are selling great.
“The big properties—the legacy properties—with water, trees, views—are selling fast,” Nevin said, making it a seller’s market.
In the specialized niche of ranch and land sales there is no substitute for the experience gained and the relationships built over time. Nevin has been involved in northern Nevada, northern California and West Coast property sales for 24 years. He is one of the few Realtors who specialize in ranches, land homes estates and waterfront properties for those who are seeking a truly unique lifestyle or investment.
Nevin works closely with clients to reach their goals regarding property acquisition and asset preservation.
They also work with clients wishing to preserve land and gain the financial benefits from conservation programs.
“I deal quite often with properties that have been in the family for centuries.” Because they have something no one else has, it quickly becomes a seller’s market, depending on the quality of the property,” Nevin said.
Nevin said the market is strong. “We have more buyers than we have unique properties.”
While the market is still price driven, Todd Renfrew with California Outdoor Properties said there is a shortage of good rangeland properties on the market. “We are seeing a variety of investors looking to get into agriculture,” Renfrew said.
Renfrew has been in the business, selling properties in northern and southern California, for eight years. During that time he has seen a shift in buyers. Technology has changed them, according to Renfrew. “You have a more educated buyer,” he said. “They can do all the leg work on the computer.”
Buyers show up with most of the information already in their hands, thanks to the internet, making it that much more important for a broker to know each property personally.
Renfrew’s diverse and interesting background includes a 3,000-head cattle operation on 10,000 acres and a start-up solar company that provides power for ranchers. While he has sold the ranch, Renfrew still runs cows on a smaller scale in Vacaville, CA.
It was there that he joined Cabela’s Trophy Properties and formed California Outdoor Properties, Inc., covering the northern California territory and southern California territory.
“We’ve had a great year,” Renfrew said, referring to 2012. And he’s confident 2013 will even be better. — Traci Eatherton, WLJ Editor