Farm land values drop in parts of Minnesota
The price of real estate can have a major effect on those considering a real estate development. It doesn’t matter if a person is planning on building a single family home or a large-scale multi-building development, if the price of land is too high, the plan may not be profitable. Therefore, news that certain farm land prices have been dropping is welcomed by many.
According to reports, the prices of farm land in southern Minnesota has been falling. Experts agree that this trend will likely continue for the foreseeable future. While the median price of farm land in Minnesota increased by 5.1 percent in 2014, data from 2014 shows an eight percent drop in the price of farmland in southwest Minnesota compared with 2013. Prices in other areas of the state have seen increases or have remained stable.
Experts say that these decreased are related to decreasing corn prices. The price of a bushel of corn has fallen from $7 to $3.50. However, they say not to expect prices to bottom-out in the same way that was seen in the farm crisis in the 1980’s. Experts are unsure if the decrease in this particular area with signal a decrease in farm land value throughout the state.
When facing significant changes in value in a particular piece of property, it can be difficult to know exactly when to sell or when to buy. However, this is just the first of many decisions that need to be made when planning a commercial real estate development. An understanding of the entire process and any potential legal hang-ups can give potential investors, developers or sellers the clarity they need to make the best decision they can.
Star Tribune, “Farmland prices softening in Minnesota,” Tom Meersman, Feb. 19, 2015
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