By: Alex Maher, Broker/Owner of Live Water Properties
Ranch sales volumes have been steady over the last 18 months, running at approximately 50% of the peak volumes seen in 2006-2007, largely devoid of developers, speculators and those using excessive leverage for ranch acquisitions. The market has essentially returned to its normal pace with a Buyer pool of agricultural and cattle operators, legacy or “end user families” and continued institutional investing. With healthy volumes, we now have the sales data in most valleys to accurately conduct current valuations. According to First Interstate Bank in Jackson Hole, the residential appraisers are no longer “checking the box” for a declining market on appraisal reports, a further sign of market stability and potentially a bottom for values. We’ve also experienced competitive bidding on multiple transactions over the past four months and anticipate a continuation of that trend for certain high quality tracts given current negotiations as such.
We are proud of our track record as local Rocky Mountain economies emerged from the recession over the past two years. In 2011, for the second year in a row, Live Water Properties sold 26 ranches, 22 of which were Live Water listings, and 10 of which had significant agricultural and/or cattle income components. Despite the attention national media is giving to the bubble concerns with rapidly escalating farm values across the country, we’ve successfully identified and sold potato, grain and cattle operations in several areas of the Rockies at a fraction of irrigated farm prices in Kansas, Iowa and other mid-western states. Given ample current inventory, we believe these regions will continue to offer competitive pricing for farm and ranch investments in 2012.
The ranch market showed an uptick in activity for us towards the close of the 2011 with over $29M in volume closing in the last 45 days plus an additional $24M pending for January 2012 closings. With more rational pricing and valuations post-correction, and an increase in financially-qualified, savvy Buyers, we are optimistic the ranch market will continue on a healthy pace with sustainable growth rates in 2012. It is important to keep in mind, many of the best opportunities are not officially on the market given confidentiality requirements. Please contact our Brokers to discuss those opportunities that may be a match for your interests.