Land is often considered a good investment. In a world of supply and demand, they’re not exactly making any more of it, so the supply is rather fixed! And, demand for farmland in Nebraska in particular has been on a tear lately, so prices have shot up.
Here are Five Fast Facts on Nebraska’s record farmland price streak:
- 💰💰How Much?? According to UNL’s Farm Real Estate Report, the official number for the per-acre farmland price increase this year is 16%! However, the Federal Reserve Bank of KC put the number between 21-31% depending on the type of land! We like KC’s numbers (and their BBQ).
- 1️⃣👍How Does This Rank? This increase is one of the best of any state in the country! Yay us!
- 🤔This Is Great, But Why? There are several reasons for this great trend. One is that farmland is usually a less volatile asset than most other investments, so it’s a safer place to park yer money. USDA data shows farmland has averaged 5.7% annual return over the last half century. Unlike movies, when it comes to investing, boring is usually better.
- ☀️📉More Of The Why - Other reasons include higher crop prices (due to scarcity from war, heat waves, and such), historically low interest rates (at least until the last few months), and political and economic instability around the world. Investors have fled more traditional investments in favor of farmland purchases this year.
- ❓Where Do We Go From Here? Is this sustainable? It’s hard to say, given there’s so much uncertainty in many markets and around the world right now. The recent interest rate hikes will certainly have an impact, too, though it’s too early to tell exactly what it will be. If you can see for certain where this one is going, you’ve got better vision than a hawk diving on a field mouse!
🔥Bottom line: So what does this mean for Paychecks? Higher sales prices obviously mean better Paychecks for sellers, but long term investors clearly see it as a win for them, as well. As with most things, it’s all about your timing. If you have farmland to sell – or if you’re looking to buy – it sounds like now is the time to do it! The window may be closing soon.
What do you think about this situation?
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