2021 Land Market Predictions

February 19, 2021

An old feeling is resurfacing in the land market. One of optimism and possible strength. As we try to find our way out of the COVID fog, recent land sales activity suggests a rise in prices is upon us for 2021. How long this ride will last is yet to be determined, but it does bring back some old feelings of 2010-2014 when we saw a steep rise in land values that could be garnered by private treaty sale or public auction. During that period, it wasn’t unusual to see annual increases of 5 to 10%. When the euphoria was over in 2014, prices remained strong, but we did see decreases in value from 2015 through 2018. 2019 data suggested a very mild stabilizing action and slight rise in premium farms. With 2020 in the books, we continued to see a slight rise in values that has set the table for what will surely be a unique 2021 season.

As we get rolling in 2021, we have seen sharp increases in the grain markets. As farm returns go, so often go land values. Additionally, we have seen interest rates remaining at a historically low rates and a general macroeconomic uneasiness to the global landscape. Add improved exports and refurbishes USDA projections into the mix and we have numerous reasons to expect a rise.

It could easily be said that we have already begun to see that. With all of us acclimating to online bidding formats and understanding how to safely hold COVID-era auctions, several sales in the last month have shown there is heavy interest from all angles. We at Worrell Land Services, like many in the industry, have adapted. Not only do we still offer top notch private treaty transactions, we have also positioned ourselves to handle auctions both in a safe in-person format, in addition to building out our own online bidding platform for those who wish to participate in the virtual realm.

There are many ways one can go about selling a piece of land. The fact also remains that every farm is inherently different, and one method does not always fit all. We pride ourselves in being able to tailor-make our approach to meet every possible need. The interest of potential buyers has picked up substantially and we are back in an era where demand is outpacing supply by a healthy margin. Regardless of a landowner’s situation or risk temperament, we are here, nimble, and ready to serve. Whether it is the traditional approach, public auction or somewhere in between, we are confident in our ability to do the job well.

It has become clear we are in a selling environment the likes of which has not been around five years or more. 2020 taught us a lot. One of the lessons is that things can change quickly. As you read this today, the evolution is underway into a seller’s market where demand is plentiful. Listing or auction, we have buyers chomping at the bit.

Written by Luke Worrell – Managing Broker, Accredited Land Consultant, Accredited Farm Manager