Northwest Farm Credit Services releases a Market Snapshot of land values quarterly. Their latest issue details market trends through 2016. The decrease in number of sales in 2013 - 2015 reflects constraints in supply rather than weak demand.
Average Land Value & Number of Sales Across the Northwest
Across the Northwest, land values varied by state, but remained stable or increased throughout.
In Oregon, agricultural land values have been strong since 2012 and are stable throughout the various regions of the state. For good-quality irrigated and dry crop tracts, market demand is strong.
In Montana, the calculated average land prices have decreased slightly coming off a recent high in 2013, but relatively speaking, the averages have remained stable. The 2016 figure is potentially misleading if applied to market demand because the market experienced a limited supply and low volume of sales of high dollar-per-acre properties in the past years. A higher number of lower quality lands at lower value-per-acre figures have brought down the overall average in the recent past.
In Idaho, tight supply of land for sale and strong demand for quality cropland has resulted in stead increasing land values statewide since 2013. Statewide the trend of strong land price combined with weak milk prices has resulted in particularly selective real estate purchases when land is intended to be part of a dairy operation.
In Washington, the average land values have been increasing since 2011. Demand for cropland and lands with permanent plants has been high as has supply of high-quality agricultural properties. In Central Washington, permanent-planting property markets are led by vertically integrated fruit warehouses with larger commercial interests and continued investment. More specifically, the development of hazelnut properties drives demand for dry and irrigated cropland. Dairies have been active participants in the property market in Western and Central Washington.
Farmland Value Trends by State
Across the region, demand remains strong for working ranches and good-quality agricultural properties due to a strong demand for grass and a limited inventory of good-quality properties. As is typical in the market, properties with premier recreational features or locales with limited private ownership are in highest demand.
Stay tuned for further market updates via Northwest Farm Credit Services.