2022 Land Values
“Overall prices are still at all-time highs. This is due to the favorable market conditions in recent years with historically low-interest rates, high commodity prices and demand for rural property outside of metropolitan areas (triggered by the pandemic),” said Justin Connolly, Certified General Appraiser and Team Leader at FCS Financial.
What are land values doing?
This is a common question among coffee shops, farms and many websites. FCS Financial appraisers see land values across Missouri are holding steady at a higher value than in 2021.
“Pasture and cropland values in southern Missouri have been trending upward for several years, but the last two years have seen 25% -30% increases,” said Christina Dicken, Vice President of Appraisal in the Springfield office.
Despite high land values, the number of sales is almost half of what was seen in 2021. The availability of land is one of the factors that may allow prices to remain steady.
“Many buyers like the safety of land and dislike the volatility of the stock market,” said Ryan Boeckmann, Vice President of Appraisal in the Hannibal office.
Land Buyers
Grumbling about out-of-state buyers can often be heard when farmland values start to rise. Our appraisers are seeing that most quality farmland transactions are being made between producers who want to expand their operations rather than investors.
There were two exceptions to this. In southern Missouri, tracts within driving distance of metropolitan areas see more out-of-state buyers who want to buy a home on acreage. Central and Northeast Missouri shows more out-of-state buyers purchasing recreational tracts of land.
“The demand for rural-residential housing continues to increase,” according to Connolly. Connolly and his team appraise property in central and east-central Missouri.
This is true in southern Missouri as well. Dicken said tracts under 40 acres are in high demand and the prices reflect it.
How is land selling?
Some land sales are making it to the multiple listing service (MLS) for realtors, it seems to depend on the area of the state. Auctions remain popular for larger tracts of farmland and some recreational land in northern Missouri. In southern Missouri, a majority of the sales are private sales between neighbors, acquaintances or family.
Acreage with a house may use a realtor that lists it on the MLS list, most agricultural tracts are not sold through the MLS.
Impact of Rising Interest Rates
None of the FCS Financial appraisers feel interest rates are impacting land buying decisions as this time.
“It seems that buyers are willing to pay higher prices because they believe land is a good investment and it will continue to rise [in value],” Dicken said.
Adlai Riekhof, Vice President of Appraisal from the St. Joseph office, feels that the combination of rising interest rates and inflation could lead to some leveling off of land values in the future but at this moment sales are not affected.
FCS Financial is sure this will continue to be a hot topic throughout Missouri and the Midwest for the next 12 months. Find your nearest FCS Financial office if you have any questions or would like to speak to one of our appraisers or loan officers.
FCS Financial employs full-time, certified, agricultural appraisers. This article combines observations seen by appraisers from northwest, northeast, central and southern Missouri in 2022.