By Jerry Lebsack, VP – Appraisal
Appraisers are often asked about trends in land markets. Many times, the best answer is: it depends. No, we are not “ducking” the question; rather, we rely on sales activity, and that depends on the area. In this article we’ll discuss why reliable sales information is crucial to valuing property, general land trends in the area and get into some specifics about valuation in different parts of Northeast Colorado.
Need for Reliable Sales Information
In order to establish a price trend, sufficient sales must have taken place in a given area to produce reliable results. We have areas where we have been able to verify several land sales and other areas where we haven’t had a usable sale in years. Over the past few years, most of the land sale activity has been in the eastern counties of the Premier territory. In the western section of the territory, sales of all land types have been limited. While is it statistically possible to build a trend line with only two sales, the validity of the data is less compared with a trend that has 20 data points.
Sometimes we are able to obtain sales information, but are not able to use it to establish a trend. The more appraisers know about a sale transaction, the more accurately the sale results can be reported. To ensure the best information is used, appraisers will verify the terms of the sale with reliable sources, buyer, seller, realtor or other trusted source. No, we are not snooping, we are just trying to get the correct information.
General Land Trends in the Area
Generally speaking, land trends are down considerably from the high point in the market 4 to 5 years ago. In most areas, the trend has stabilized and in some cases is trending upward.
A few years ago, property was selling regardless of the land quality. Today’s buyers are becoming more selective. Demand is good for land that has average or better quality and amenities. More marginal properties are on the market longer and selling at lower levels.
So What is my Land Worth?
Again, it depends. For example, sprinkler irrigated land in Phillips and Yuma County can fall anywhere between $4,000 to $7,200 per wet acre. Differences based on water availability (quality and quantity and other amenities. Dryland is this area will run from $1,000/ac to $>$1,800/ac. Pasture falls between $600/ac to $850/ac.
Morgen County irrigated land has historically sold at the highest levels in the territory but this is highly dependent on the water source and location. Dryland and pasture range from $800/ac to $1,200 per acre and $450 – $700 per acre respectively.
Logan County dryland ranges from $750/ac to $1,300/ac and is very dependent on location. Irrigated land ranges from $4,000/ac to $5,500/ac. Pasture ranges from $500 – $725 per acre.
Sedgwick County dryland ranges from $900/ac to $1,400 per acre. Irrigated sales and pasture sales are limited in this area.
Washington County dryland ranges from $600/ac to >$1,400 per acre. Pasture sales range from $500 to $750 per acre.
This is a brief discussion of price trends in the area. If you would like additional information, please stop by and visit with Ryan Lebsack in Sterling or Jerry Lebsack in Yuma.