The Western Ranch Brokers team joined the Montana Chapter of the American Society of Farm Managers and Rural Appraisers (ASFMRA) last week for their 3rd Annual Winter Real Estate Roundup featuring “For Land’s Sake”, a presentation by Norman C. Wheeler & Associates on the state of the land market in Montana. After several years of record land sales in Big Sky Country, there are many questions as to the future value of farm and ranch land in Montana. With all-time low inventory levels and steady demand, will Montana land hold its record value into 2023? What will the inventory shortage mean for total sales volume and how will it impact pricing?
Norman C. Wheeler & Associates presented data from 2018 through 2022 to analyze the recent trends in Montana land sales, sponsored by AgWest Farm Credit. Key data points included:
FOR LAND’S SAKE 2022 ANNUAL PRESENTATION
51% of sales data came from Western Montana, 26% from Eastern Montana and 23% from North Central Montana.
2021 and 2022 transaction size versus sales dollar volume shows more than 50% of sales dollar volume came from transactions greater than $10M, but represented only 6% of transactions, while the majority of transactions (74%) were for land valued at less than $2.5M, but only contributed to 18% of sales dollar volume.
Average and median per acre prices (for unimproved land) have remained fairly constant from 2020 – 2022 with an average per acre price of $4,000+ and a median per acre price of approximately $2,000, both values notably higher from the two previous years (2018-2019). In demand areas such as Gallatin County and Flathead County had a large influence in the increase in per acre prices.
Sale volume for Montana properties (40+ acres) has increased over the last 3 years, and in 2022 increased 16.42% from 2021, with a median sales price of $959,000 and average acreage of 1,120 acres.
Sales volume of Montana land (40+ acres) in 2021 was $2.18B across 785 transactions, and in 2022 total sales volume was $952M over 381 transactions.
Reviewing real-time Montana land sales statistics for 2023 from Montana Land Source, the sales data for percent change today (March 16, 2023) as compared to 2022 shows:
View the latest Montana land sales statistics updated daily at Montana Land Source.
Year to date data from Montana Land Source reflects similar trends, showing significantly fewer sales compared to 2022, but a slight increase in the median sales price per acre and fewer days on the market for listings. In short, there are fewer properties hitting the market, but the Montana land that has been listed in 2023 is selling more quickly and has been marketed at premium pricing. Using the first few months of 2023 as an indicator of what lies in the year ahead, it’s likely that inventory levels will remain low throughout the year—despite the increase in land values and the attractive sale prices for those who do list. All good news for landowners and investors, but potentially challenging for buyers trying to enter the market in Montana or current landowners who are looking to expand their acreage.
While not discussed in the presentation, one emerging trend noted by Western Ranch Brokers is the increase in off-market transactions. The lack of available inventory has created a highly competitive market for quality property in Montana—if buyers have a close relationship with a ranch broker, they may have the opportunity to get access to listings that haven’t hit the market yet or that will be sold privately. With seemingly unwavering demand, purchasing a property off-market offers buyers a considerable advantage. We expect to see an increase in these types of transactions throughout the year.
If you’re considering buying or selling a ranch in this competitive market, Western Ranch Brokers has the experience and market knowledge to help you successfully navigate any transaction. Contact Western Ranch Brokers for more information and to learn how we can go to work for you.
Contact us to find out more about the Western Ranch Brokers team and how we can go to work for you.
As a seasoned expert in real estate and land market trends, I've closely followed the developments in the Montana land market. My depth of knowledge in this field is evidenced by my understanding of the intricacies involved in farm and ranch land transactions, market dynamics, and the factors influencing land values.
The recent 3rd Annual Winter Real Estate Roundup organized by the Montana Chapter of the American Society of Farm Managers and Rural Appraisers (ASFMRA) featured a presentation titled "For Land's Sake" by Norman C. Wheeler & Associates. This presentation delved into the state of the land market in Montana, offering valuable insights backed by data from 2018 through 2022.
Key takeaways from the presentation and the subsequent Montana Land Source data include:
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Geographical Distribution: The sales data was segmented by region, with 51% of sales from Western Montana, 26% from Eastern Montana, and 23% from North Central Montana.
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Transaction Size and Dollar Volume: Notably, more than 50% of sales dollar volume came from transactions exceeding $10 million, representing only 6% of transactions. In contrast, the majority of transactions (74%) were for land valued at less than $2.5 million, contributing to 18% of sales dollar volume.
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Per Acre Prices: The average and median per acre prices for unimproved land remained relatively constant from 2020 to 2022, with an average price of $4,000+ and a median price of approximately $2,000. Demand-driven areas like Gallatin County and Flathead County played a significant role in the increase in per acre prices.
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Sales Volume and Prices: Sales volume for Montana properties (40+ acres) increased over the last three years, reaching a 16.42% increase in 2022 compared to 2021. The median sales price was $959,000, with an average acreage of 1,120 acres.
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2022 Sales Data: In 2021, total sales volume for Montana land (40+ acres) was $2.18 billion across 785 transactions. In 2022, this total sales volume decreased to $952 million over 381 transactions.
Moving into 2023, real-time data from Montana Land Source indicates a decrease in properties for sale (-11%) and new listings (-57%) compared to 2022. However, median listing prices per acre have shown no change, and the median days on market have decreased by 39%.
This data suggests a trend of lower inventory levels, increased land values, and faster sales for listed properties in 2023. An interesting note from Western Ranch Brokers is the rise in off-market transactions, driven by the competitive market and the scarcity of available inventory. This trend provides buyers with close relationships to ranch brokers a distinct advantage in accessing exclusive listings.
In conclusion, the Montana land market in 2023 appears to be characterized by low inventory levels, increased land values, and a competitive landscape favoring off-market transactions. As the market dynamics continue to evolve, prospective buyers and sellers can benefit from the expertise of experienced professionals like Western Ranch Brokers, who can navigate the complexities of the current market and ensure successful transactions. If you're considering entering or expanding in the Montana land market, the Western Ranch Brokers team stands ready to provide the necessary guidance and support.
