November Is The Busiest Month for Land Auctions
Jim Rothermich from Iowa Appraisal is keeping a close eye on this month’s land auctions, because as he says, November is the busiest month for land auctions.
“We’re getting strong results. High interest rates and sub-$5 per bushel corn is not affecting land market conditions,” Rothermich says.
Related Article: Look Out Iowa! Cropland Auction Sets Fresh Record in North Dakota
He shares two examples, both in corn and soybean production:
- Nov. 3, Plymouth County Iowa: 100 acres x $23,600/acre= $2,360,000; investor buyer with local ties; no development potential.
- Nov. 6, in Sioux County Iowa: 80.89 acres x $26,000/acre= $2,103,140 ; area farmer buyer; no development potential.
Rothermich says this week is brewing to be the busiest.
Busiest week of the year for land auctions and starting the week very strong.... Sold! $1.59+ million or $10,900/acre. CSR2- 46.8. pic.twitter.com/5fP1E3LPMy — Jim Rothermich, MAI, ARA, ALC (@theLandTalker) November 6, 2023
RD Schrader of Schrader Real Estate and Auction Company based in Indiana has partnered to oversee auctions in 40 different states.
“There’s been tremendous, tremendous competition over the last couple of years,” Schrader says. “With these interest rates most recently there's probably fewer buyers than there was a year or two years ago.”
“These interest rates will continue to impact things, but there's still a lot of cash out there looking for a home and so a lot of competition for farmland,” he continues. “For a lot of operators what they do own has appreciated in some pockets the better part of 50% over the last four years or so.”
You can hear more from Schrader on the Top Producer Podcast:
Adding to the competitive market has been the 40 year evolution to more multi-tract sales evolved out of the 80s.
“At that time it was trying to get farms broke down some bite sized pieces where there could be some more interest in the market,” he says. “If you can cater to the market and offer the farm in pieces, it just makes for more competition. The idea of making a free market economy where the small buyers can compete against the large buyer and everybody has a fair chance to give their best bid, just creates a very fluid marketplace and tends to maximize the value of a property.”
Schrader says while the online component is important to offer today, it’s not a driving factor in the record sales being witnessed.
“We always offer the online component,” he says. “When you start talking about multiple tracks we believe and have been convinced by also doing online only that it's best to be able to look at buyers in the eyes and have the buyers have easy access to you and be sitting in in the room and when you're spending you know kind of money these farms are bringing these days a lot of folks would rather be in the room. And so we typically always offer that live component and, you know, the vast, vast majority of buyers want to be there and see it unfold.”
