By the Yankee Farm Credit Appraisal Team
It has been widely reported by some outlets, that there is a land-rush going on in Vermont and yet there is concern as far as the impact on the dairy market depressing prices by others. The Yankee Farm Credit Appraisal Team has analyzed sales of 100-acres or more over the last five years and finds that across the board for larger farm properties, land values have remained stable when all factors affecting sales price are figured-in. The exception to this are fee simple cropland values around the northern portion of the Lake Champlain Basin (Grand Isle, Franklin and Chittenden County in VT and Clinton County, NY). In this region cropland values continue to trend upward.
There does appear to be increased demand for strictly residential properties as well as increased demand for recreational get-a-ways and life-style farmettes (hobby farms or subsistence farms). Many of the early buyers were looking for move-in ready “safe havens” out of the city. This boosted demand for waterfront and second home type properties close to ski areas, quaint downtowns and within easy access of the larger metropolitan areas by Interstate. At the agricultural end of this spectrum, we have not seen a run-up in pricing so much as a reduced marketing time.
An analysis of residential sales across the multiple listing services points toward a lack of supply rather than an increased demand, which has affected sale prices. This is most likely due to many potential sellers have chosen to sit still during the crisis as VT, northern NY and western NH were relatively safe havens, while other parts of the country were no longer attractive places to relocate, whether for job opportunities or change of climate.
There is some concern that the recent spike is unsustainable as the pandemic settles out and there may be a rollback in some areas as panic buyers return to areas that are more metropolitan. Will companies continue to pay top salaries for remote employees living in low cost areas? Will families miss culture, shopping and entertainment opportunities that Boston, NYC, southern CT have to offer?
Fortunately, real estate prices for Yankee’s core lending sectors remain stable and should not suffer if the flight from the metro areas reverses.
The appraisal department has been involved with several transactions this spring with multiple competing offers on sizable operations, which suggest strong demand for land. We will keep on top of this situation as it unfolds.
Machinery & Equipment
From all the signs that we see, used machinery and equipment values have remained strong. This is most likely due to the combination of COVID induced supply shortages and the increasing cost of new machinery is shifting buyer demand from new to used, due to affordability.
The Yankee Farm Credit Appraisal Team is available to assist buyers and sellers with property valuation questions.