Land values rise again
WORTHINGTON -- In the span of five years, the market value on agricultural land in Nobles County has increased by nearly $1 billion, and the trend will likely continue to climb as buyers keep paying record high prices.
Nobles County Assessor Byron Swart recently presented information to Nobles County commissioners on trends in agricultural land, residential and commercial sales recorded in the county between Oct. 1, 2009 and Sept. 30, 2010.
In that one-year period, 25 agricultural land sales were recorded -- 21 sales were for bare land and four sales were for land and buildings, both of 34.5 acres or more. Those deeded acres (including tillable land, buildings, roads, pasture and waste land) sold for an average of $4,455.37 per acre. The highest per-acre price paid in Nobles County was $6,400, while the lowest recorded per-acre price was $2,291.
As farmers continue to pay more for crop land, the spread between the county's estimated market value and the price people are paying for tillable and deeded acres continues to widen.
As a result, Swart and the county are increasing market values across the board on all agricultural land in the county by 15.74 percent this year. That brings the county's total agricultural land value to $2,092,108,300 for 2011 -- nearly $1 billion more than the 2006 ag land value of $1,117,000,000.
Tillable agricultural land in Nobles County increased in value by nearly $700 per acre in 2010-2011 over the previous 12-month period, while deeded land increased approximately $650 per acre.
With less than two months to go before the end of the assessor's 2010-2011 year, Swart already predicts market values will need to increase again in 2012.
Less than two months after the Sept. 30, 2010, cutoff, Swart recorded one agricultural land sale at $7,800 per acre. Since then, he recorded one sale at $7,750 per acre, and others that were "right up in that area."
"We were sitting pretty good until the sales (last fall)," said Swart. "They just went out of this world."
As a result of the continued rise in ag land value, Swart said agricultural land is taking on more tax capacity. Based on the year ending Sept. 30, 2010, more tax dollars are generated from agricultural land than residential, commercial/industrial and other properties combined in the county.
Still, residential and commercial/industrial properties will see an increase in their property's market value when statements are sent out in October or November -- barring a continued state government shutdown, of course.
Market values on residential properties will increase by 6.51 percent (7.76 percent for residential properties in the city of Worthington); while commercial and industrial properties in Worthington will actually see a 5 percent drop in market value.
"Homes in Worthington seem to be selling higher than what we've got on them," Swart said. "Statewide, the market seems to be going down because you're taking in the metro area and their home (values) are dropping, whereas outstate, we're still seeing that level or slight increase."
In surrounding counties in southwest Minnesota, market values for deeded agricultural land will all be increased based on sales from Oct. 1, 2009 through Sept. 30, 2010.
In Rock County, where deeded land sales ranged from a low of $2,710 per acre to a high of $8,720 per acre, market values will increase by 11.02 percent. Pipestone County sales ranged from $2,500 to $4,500 per acre, with market values to increase 10 percent, while Murray County sales ranged from a low of $3,101 per acre to a high of $4,130 per acre for a market value increase of 10.8 percent.
In Cottonwood County, deeded agricultural land sold for a low of $2,455 per acre to a high of $7,105 per acre, with market values to increase 12.3 percent. Jackson County will see the lowest market value increase, at 9.53 percent, after recording deeded agricultural land sales of $3,425 to a high of $5,900 per acre.