The Future of Farmland Values
For over a decade farmland value have been rising at a rate aster than anyone could have guessed.
This is the first time, in a long time, that we have a couple of factors working against rising land values.
Interest rates
-Buyers are telling us that higher interest rates are cooling their enthusiasm for farmland purchases.
– Some lenders are raising their interest rates even though there have been no federal increases recently.
– Nonfarm buyers are slowing their purchases more than farmer buyers.
-Earlier today we had another farmland buyer tell us that he will not be purchasing farmland at this time due to higher interest rates.
Grain prices and Cattle Prices
-Grain prices have taken a pretty hard hit, and this downturn in profitability is putting pressure on farmland values.
-Cattle prices have been volatile but have trended up the past year. We have seen ranch land, in good moisture areas, increase in value over the past 6 months.
General Market Trends
Inventory of farmland is rising but is still quite low. I anticipate this inventory to continue to rise throughout the winter months.
Land values are rising steady in areas with strong profitability. These areas are seeing quick sales, multiple offers are not uncommon on quality land.
Land values in areas that have had lower profitability in the past years are now finding it challenging to find any buyers, or tenants, for their land! This is something we have not seen in a very long time.
Looking at the province wholistically the market is much slower than it was a year ago.
I am seeing more area specific diversity than I have ever seen before. What are you seeing in your areas?
See below for a Global TV Interview with Ted talking to Chris Carr about farmland values.
Ted is always happy to meet new people and to explore new opportunities. He is your expert in the field!
Feel free to call 1-306-986-7255 or email ted@cawkwellgroup.com
For more information about Ted and the rest of the team, visit our website to download our Buyers and Sellers Information Packages and learn how the Cawkwell Group can be beneficial in helping you buy or sell farmland real estate in Saskatchewan!
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