Successful auction
August 10, 2007
Recap of Grimsman-Tener Auction Thursday evening, March 22 we had a very successful auction of 149 acres of tillable farmland in two adjoining tracts between Andale and Mt. Hope Kansas. Both sold for an impressive $2800 an acre. A combination of several things led to the success of this auction. First and foremost, it was excellent farm ground located in a very popular and aggressive farm area. Secondly, the Seller wisely opted to convey the entire growing wheat crop and all 2007 FSA program payments to the Buyer. That and giving immediate possession on the spring land made it an immediate cash flow situation for the Buyer. Thirdly, good crop conditions, a good grain market, and a light rain during the auction enhanced the attitude and spirits of the farmer and investor buyer. That is a whole lot of positive, which makes for an excellent auction situation. As long as the markets remains strong, and borrowed money is affordable, I see nothing but positive for farm land. We have seen a steady increase in demand from not only local farmers, but investors, and even out of state buyers. This particular ground in my opinion was strictly farm land. I would even go so far as to say that this land wasn’t even transitional yet. Development is eking that direction, but simply not there yet. We had a packed house of buyers, but not a single developer attended this auction!Urban sprawl is a driving force, especially in the northwest quadrant of Wichita, which in turn creates 1031 tax-deferred exchange buyers who are looking for transitional and farmland. It breaks my heart to see homes being planted on some of the best ground God put on earth, but it is an actuality. As long as builders continue to plant houses, and congress doesn’t change 1031 rules regarding FSA payments, your 1031 buyers will be a driving force in farmland prices. Add this to the “farmer” positives, above, and you have an even stronger market. With that in mind, I think we will see a strong farm land market for the next year or two. Did I mention that those combinations make for an excellent auction situation? Don Burford, Assoc. Broker and Auctioneer for Jeff Lange Real Estate
