Real Estate Auction Report:
November 19, 2008:
An 80 acre tract of level to moderately sloping riverbottom with 70.3 acres of HEL crop land with a CSR (corn suitability rating) of 79.4 on the tillable acres brought $304,000 at an auction conducted by Hertz Real Estate Services. There were a couple of grain bins on the property and an ROW easement through the middle of the parcel, but I don't think those factors affected the price appreciably. The price comes out to $4,324 per crop acre or $54.46 per CSR pt/a. That is an 8 to 10% drop from the way land was selling this summer. The biggest factors in that drop are the fall in commodity prices, uncertainty about the health of the world economy, and a tightening of credit (though ag credit and particularly ag land credit seems pretty solid compared to the rest of the financial industry).
Here is an interesting side note: The previous purchaser of this property paid $15,750 for the whole 80 in 1964. Even with inflation, a nineteen-fold increase is a pretty good return on investment (42.9% per year), and a stepped-up basis at death, to boot.
Here is an interesting side note: The previous purchaser of this property paid $15,750 for the whole 80 in 1964. Even with inflation, a nineteen-fold increase is a pretty good return on investment (42.9% per year), and a stepped-up basis at death, to boot.
