Pressure : 29.73 in
Dewpoint : 45.0 °
Wind : West
Is ag land the next real estate bubble?
A lot of farmland in Adams County was auctioned off at a hefty price Thursday. 1800 acres went for $15.1 million. It's the biggest sale to happen in the state this year.
But, while farmers are buying some say the ag land bubble will eventually burst.
It didn't seem to have an affect on buyer's bids. But the farmers News 5 spoke with say an ag land bubble burst will eventually hit, it's just a matter of when.
One thousand eight hundred fifty-five acres of a land.
Prices range from around $6,000 an acre on the tracts that include quite a bit a grass on up to over an $11,000 an acre for some of the better irrigated land.
Ten to fifteen miles outside of Hastings, nine buyers invested in six different tracts of land for $15,130,000.
This is only a portion of the land that was auctioned off Thursday. While bidders are pleased with the outcome some made their bids with concerns.
"I've seen land sell when I was young for $325 an acre and everybody said they were going to go broke then so just playing with more dollars and that's the scary part," said John Granstrom.
Today, farmland is said to be one of the biggest real estate investments but like the housing market the industry goes in cycles.
"It's a concern, a big concern, but I guess you never know when the right time is to buy land," said Granstrom.
Some say the housing market and farm bubble can't be compared.
"It could collapse a little bit, but I don't see it happening because the world population is growing and there will always be a need for food," said farmer Jon Hemberger.
"These prices are strong but I believe that the talk about a bubble can be leveraged some by the understanding that there's not a lot of debt involved in these purchases," said R.D. Schrader, Schrader Real Estate.
"Hope and pray the prices hold like they are," Granstrom said.
The buyers News 5 spoke to say the drought did not have an affect on their bids. Irrigation in the particular NRD being sold is good and was not impacted like other districts irrigated by the Republican River.
KHASTV on Facebook