December 29, 2023
While price increases for US farmland were still observed in 2023, signs indicate the market is starting to cool. Statewide farmland prices in Kansas continued to escalate in the first half of 2023. The continued growth in prices was supported by a number of factors, such as farm incomes and liquidity.
The experience, however, was not shared across all regions or quality grades. Depending on the area of the state, some found modest increases while others found declines due to climate and soil morphology and topography. Commodities are likely to be impacted by ongoing conflicts in the Middle East and Ukraine. More than likely there will be a boost to the economy leading up to the election. Yet, it is encouraged for producers to take a seasonal approach to selling. Future prices and values are very uncertain right now.
The U.S. Federal Reserve continued efforts it began in 2022 to slow the rate of inflation. Since interest rate increases began in March 2022, the federal funds rate has been increased 11 times, upping the rate 5.25 percentage points.
Dr. Stanley Longhofer, Director of the Center for Real Estate at Wichita State, recently shared the forecast for 2024. He believes that there should be a tightening of the spread between mortgage rates and the 10 year treasuries. Then once the housing component of the CPI slows that will help reduce rates. We should see a settling of loan rates and to drop 2% by the end of 2024.
As Mark Twain said, “Buy land, they’re not making it anymore”. Contact us to seek professional advice and assistance when buying or selling land. Gene Francis and Associates is here for you!