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What Will Happen to Farmland Values in 2024?

The past decade has been a roller coaster for the West Central Wisconsin land market, with prices at historic highs and values sometimes doubling in just a few years. What can buyers and sellers in this region expect from the market in 2024?

“Land values are likely to stay steady due to limited inventory,” says Danielle Tenner, a certified general appraiser for Compeer Financial. “There are more buyers than sellers, so we expect the market to remain competitive even with higher interest rates.”

“The high values we’ve seen for cropland may have peaked,” she continues. “But maybe not yet for recreational land, as there are often cash buyers competing for the best tracts.”




Strong buyer demand outweighs high interest rates

The West Central Wisconsin land market is driven by a wide variety of buyers, creating a competitive environment where properties are quickly snatched up. Danielle explains that land continues to be a popular investment for both rural and urban buyers. Plus, the expansion of remote work has made country living possible for people who might otherwise need to live near bigger cities. 

But what about those high interest rates? Rates have increased multiple times over the past couple of years, which means some buyers have had to adjust their budgets or simply can’t afford to purchase at this time. Yet higher rates haven’t cooled the market, and the overall demand for land remains strong.

“Higher rates mean some potential sellers are choosing to stay put for the time being,” explains Danielle. “They don’t want to sell and lose their current low-rate mortgage. This contributes to the low inventory of land for sale, with buyers competing for a small number of listings.”

Ground quality still plays a crucial role in land value

Trends in farmland values are as varied as the land itself. West Central Wisconsin is home to a wide range of rural landscapes, including recreational land, cropland, irrigated dairy farms, poultry farms, Amish farms, smaller part-time farms, and rural residential properties.

When it comes to cropland, the quality of the ground plays a crucial role in determining its value. Danielle says, “Land with higher percentages of tillable soil and no wooded patches tends to command a premium. This type of farmland is optimal for high yield potential and the opportunity for farmers to expand their operations.”

Location also plays a factor in farmland purchase decisions. “Farmers would often rather purchase less-perfect land that is closer to their existing farms rather than more tillable land that is farther away,” she says. “Sometimes proximity simply outweighs everything else.”

An appraisal is your best way to understand value

For individuals looking to buy or sell land, Danielle advises getting an appraisal done first. She explains, “Because every farm and plot is unique, an appraisal is the best way to get a clear understanding of the market value and ensure both buyers and sellers are making smart decisions.”

Appraisals are available for a range of purposes, including lending, estate taxes, and financial planning. Appraisers use their expertise to evaluate the specifications of an entire property and compare those details to sales of similar properties to help estimate the value of a plot of land.

For more information and to sign up for our monthly newsletter about agricultural valuation, visit our Appraisal Services page.

Danielle

Tenner

 
Certified Appraiser
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