According to a recent article from the Springfiled State Journal, some investors are buying the farm… literally.The record farmland prices that are shaking up rural America offer a potential bonanza for sellers.
A $13,000-an-acre sale in Christian County last fall was the latest sign the record run-up in Illinois farmland prices has a ways to go, based on a sales-trend update released this week.
The average price for all types of land was $7,330 per acre for 2011, up 21 percent compared with 2010, according to the annual report from the Illinois Society of Professional Farm Managers and Rural Appraisers.
“A good part of this tremendous move in Illinois cropland values is based on increasing farm income returns and expectations of strong income into the future,” survey general chairman Don McCabe said in the report.
Prime land sold for about $10,500 an acre, good land at nearly $7,500 and average land at a little more than $7,300 an acre.
Farmland prices in Illinois have increased an average of 12 percent a year since 2005
Money from recent farmland sales is helping families pay off debt, buy second homes or make other investments, auctioneers say. Some finance education for their families.
But not everyone who owns farmland is fully aware of the opportunity, over the past decade, U.S. farmland has returned an average of 15.5 percent a year, according to a widely watched index from the National Council of Real Estate Investment Fiduciaries. That compares with about 4.1 percent for the Standard & Poor’s 500 stock index and about 1.8 percent for 90-day government bonds.
Gold? About 19 percent.
Farmland generates not only regular income but also capital appreciation and can be used as a hedge against inflation. Another benefit: farmland returns tend to be immune to stock or bond fluctuations, making it a good diversification too!
So, if you are interested in buying or selling farm land in Central or Southern Illinois, contact me today 217-202-0571 to schedule a consultation.