Have farmland prices finally topped-out? - WALB.com, Albany News, Weather, Sports

Have farmland prices finally topped-out?

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May 18, 2007

Lee County -- Many South Georgians are suffering sticker shock after seeing their property values skyrocket. Tax revaluations are hitting large agricultural land owners especially hard.

Real estate consultants say most of the re-evaluations are correct, because the cost of rural property in South Georgia has soared in recent years. But now real estate experts say prices are leveling off, as demand slows.

Dr. Joe Marshall says the golden trend for South Georgia agricultural property has slowed considerably. After Hurricanes Bonnie, Charley, and Ivan battered Florida and sent insurance costs soaring, many Sunshine State large land owners sold out, buying cheaper South Georgia property.

"Largely Florida landowners, who are selling their land for tremendous prices.  Really for housing and commercial development there, and re-investing in South Georgia," he says.

From 2004 to 2006, 20% to 40% annual gains in South Georgia agricultural real estate values were commonplace. But now that run has slowed.

"I think we are at a plateau," Marshall said.

Even with lower demand, Marshall says the price for South Georgia farmland has leveled because buyers are doing tax free land exchanges.

"That factor will cause the prices to stay where they are now, but I don't see anything on the horizon make them increase," Marshall said.

Marshall says ten years ago irrigated farm land like this would sell for almost double what a natural forested property would sell for.  But today,  farmland is not moving; buyers want recreational land. "Trees, must have water, cabin, maybe pasture, paddock, something to attract deer and turkey, an area that would attract quail."

Marshall says South Georgia land owners are shaking their heads at tax re-evaluations, but he says they are correct.

"It's based on solid economics," Marshall said.

Marshall says the proposed 2007 farm bill could be the biggest factor in future South Georgia agricultural land sales.  If government supports are dropped dramatically, Marshall said many South Georgia farmers could be selling their land, looking for a new line of work.

Dr. Marshall has sold agricultural real estate in South Georgia since the 1970's.  He doesn't expect significant population growth here, because he doubts their will be any large industrial or job growth.

A look at the price of two recent farm sales in Terrell County might point out what Dr. Marshall says is the latest agricultural real estate trend.

One Farm in Terrell County sold in February for roughly $2,500 an acre. It was rated good quality property but was made up of mostly un-irrigated cropland and young pines and had only a three acre pond.

Another farm in Terrell County sold in April for more than $3,300 per acre. It was roughly the same size and rated the same quality land, but this farm had much more bottomland hardwood acreage, a 78-acre lake, and twice as much irrigated cropland.

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