The land bubble shows no evidence of bursting, but resistance to higher land prices in some areas is showing up, according to Farmers National Company real estate agents.
Lee Vermeer, the Omaha firm's vice president of real estate operations, has witnessed some of that resistance. High quality land continues to sell quickly and well, but Vermeer says location is becoming more important in the land market. Local conditions, including water availability, as well as high fuel and input costs are being mentioned more often.
"We have heard a lot of talk about a potential bubble in the farm and ranch land market, and people are asking when the bubble will burst," Vermeer says. "While I don't see the bubble bursting, I do see signs of the market changing."
FNC sales agents and other brokers from around the country are all seeing the inventory of land on the market build.
"This is a sign that it is taking longer to market properties, and demand is not as strong as it was 6 to 12 months ago," he adds.
Sandi Groshong and Gary Joseph, FNC real estate agents in Cambridge, say that large tracts of quality non-irrigated cropland in southwest Nebraska and northwest Kansas are selling up to a high of $800 an acre. Irrigated tracts are selling from $1,250 to $1,750 an acre, depending on the irrigation type and the water availability.
Medium to lower quality farms are selling from $500 to $675 an acre. Top quality rangeland with good fences and water is selling for $400 an acre, while lower quality rangeland is selling at approximately $275 an acre.
Low quality farms are getting more difficult to sell unless they are next to a strong buying area, they say.
"The local buyer who needs to expand his or her operation continues to be our main buyer," Groshong and Joseph add. "Irrigation water from a well or canal is a major concern in the area because all wells are metered with 8 to 13 acre-inches of water allowed for 2006."