Price Of Farm Land On The Rise

DAYTON - Barely three months ago, Dayton-based real estate broker Blaine Bickelhaupt sold a 1,700-acre farm in Whitman County for about $1,600 an acre.

If he sold the same property today, he could probably get $1,900 per acre.

"I have investors from across the country looking for farm ground," said Bickelhaupt, owner of Windermere Real Estate/Blue Mountain realtors, who has a client base of about 10 potential buyers interested in crop land in the Pacific Northwest. Two years ago, he had perhaps two or three who were interested, he said.

That's how fast interest in agricultural land has shot up recently.

Driven by rising prices for food commodities, low interest rates and the instability of other investments, demand for farm land has increased across the country.

"No matter what happens, the dirt is going to be there," Bickelhaupt said about the investors' reasoning for putting their money in agricultural land.

According to the U. S. Department of Agriculture, the average price per acre nationwide rose to $3,030 in 2011 from $2,770 last year, a 9.4 percent increase. Of the three Pacific Coast states, land values rose the fastest in Washington: to $1,960 in 2011 from $1,890 the previous year, an increase of 3.7 percent.

In the southeast corner of Washington, investors are eyeing dry crop lands with average rain fall ranging from 15 to 24 inches.

Some of the investors are farmers themselves, while others are simply parking their cash long term.

Unlike homes, whose prices have fallen steadily and whose sales can take months if not years in some local markets, agriculture land gets snapped up quickly, area realtors said.

"When you get a farm listed, it doesn't take long for it to sell," said Mark Grant, a Prescott-based real estate agent for the Windermere office in Walla Walla. "The majority are cash buyers."

With listings in Walla Walla and Columbia counties being few and far between, it's a matter of weeks or a few months for the property to change hands.

Sometimes, the properties don't even get listed with sales negotiated among local buyers and sellers or households within the same family.

Land in wheat, peas and CRP does well. Land with vineyards doesn't seem to be quite as popular at the moment, Grant said.

In Columbia County, the number of sales of agricultural land has dropped in recent years, said Garry Snyder, owner/broker at Christy's Realty in Dayton.

"Nobody's selling it because the price of wheat is so good," he said.

Columbia County Assessor's records confirm this. In 2007, 14 properties with acreage considered "tillable," changed hands. In 2011, there were only four such transactions.

Prices went up accordingly, from less than $1,000 per acre five years ago to an average of about $1,500 per acre this year.

Bickelhaupt said his investors are looking for steady income from the land, at abouta4to6-percentreturn on investment per year over 10 years.

The quality and value of local farm land varies widely, depending on rainfall, whose measure can fluctuate wildly within miles.

"Each farm is different," he said.

For Bickelhaupt, the income from those agriculture land transactions has been important, representing more than half his total gross sales volume for 2011.

"Farm sales have kept me going," he said.