After a record-breaking price gain during second quarter this year, the land market has paused to take a breath. The average price-per-acre for rural land in southwestern Wisconsin during the third quarter this year dropped 16% compared to second quarter ending up at $3,308/acre. In studying the details I find that this lower average price is (in most cases) a reflection of the type of properties that were sold during third quarter rather than a drop in value. The average parcel size was larger and the percentage of tillable land was significantly lower which affects the final $/acre in a transaction.
This plateau in the market follows the 2014 trend of higher prices during the first half of the year followed by a third quarter drop. If the market continues to follow last year’s trend we will see a nice price recovery in the fourth quarter. Current market activity indicates this is quite possible. The number of transactions during the third quarter remains fairly high at 36 as well as the number of acres sold at 3,670 (second quarter saw 37 transactions in which 3,162 acres sold).
Iowa County and Grant County felt the strongest price correction which is likely due to larger parcel sizes and mostly recreational land being sold (and very little agricultural land.) Vernon County also felt the pinch with a 25% drop in the average price. One possible factor there could be the sale of several tracts of land with conservation easements which tend to hamper the value somewhat. The remaining four counties held the line on price in which any price changes can be attributed to the type of properties sold.
Average Price-per-acre by County
|4th Quarter||1st Quarter||2nd Quarter||3rd Quarter|
If you would like a more detailed market report (free), visit www.WisconsinLandValues.com for instructions on how to order.
Buyers and sellers need to be aware that average sale prices are only a general guideline. An on-site property evaluation by an experienced land agent is needed to give you an accurate picture of what a property is worth in the current market. To learn more about the rural land market in Southwest Wisconsin, begin your search here: Southwest-Wisconsin-Real-Estate.com*SW Wisconsin includes Grant County, Lafayette County, Iowa County, Sauk County, Richland County, Crawford County, & Vernon County. All data was taken from the SCWMLS & WiREx. Because this article was intended to review the rural land market, properties smaller than 20 acres, residential, and commercial land sales were not included.