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ow much is your land worth?
To you it might be the most valuable property in the world, but unless you have hard data on market trends in your area, you’ll never know for sure. Fortunately that kind of information is available for several states thanks to a friendship forged over 50 years ago. Back in the mid-1960s, three Texas Aggies with a love of agricultural economics — George Cunningham, president of the Federal Land Bank of Houston, and Texas A&M University professors Dr. A.B. “Pat” Wooten and Dr. Ivan W. Schmedemann — agreed to share resources so people could have more information about land markets. It was a perfect partnership: Cunningham’s bank had information on land sales, and Wooten and Schmedemann taught real estate professionals, rural appraisers and Farm Credit employees how to assess land values.
and 14 affiliated lending cooperatives, also called associations, in Alabama, Louisiana, Mississippi, New Mexico and Texas.
and easily outdated. It’s human nature to find declining values hard to accept or be overly optimistic that they’ll go up.
“The research agreement allows us to do things that no other center in the country can do,” says REC Director Gary Maler. “We are always on the hunt for new ways to look at the economic drivers of real estate activity. Quality data is critical, and this is the most consistent data that exists in land markets. That’s a big deal.”
“Having transactional data, we can present what’s actually going on in the market,” says Dr. Erin Kiella, a former consultant for the Federal Reserve Bank of Chicago who joined the REC in January as assistant research scientist. “You can see the demand for that in the Annual Outlook for Texas Land Markets conference that the center puts on. We have close to 500 people coming from all over the state to hear Charley’s market update, which comes directly from our work with Farm Credit.”
Sales Data vs. Surveys Landowners, real estate agents, appraisers, lenders, tax accountants, estate planning attorneys and others are hungry for market information that is accurate, current and objective. “We look at everything that moves through the market,” says Dr. Charles Gilliland, the center’s rural land expert. “There are a lot of dynamics going on beneath those numbers. Sometimes we see a trend before the guys on the ground notice anything. “It’s a unique situation. Most of the data at other universities is based on opinion, on surveys.” Surveys — such as USDA surveys of farmers or Federal Reserve Bank surveys of ag bankers — can be useful, but are subjective
Reliable Data Is in Demand One reason the information is in such demand is because sales prices are not publicly disclosed in some states, such as New Mexico, Mississippi and Texas. “In a nondisclosure state, it can be extremely difficult to get verified information about prices,” says Jeff Royal, collateral risk manager for Lone Star Ag Credit, a Farm Credit association based in Fort Worth, Texas. Gilliland adds that even in disclosure states such as Alabama and Louisiana, sales data isn’t routinely gathered in one place.
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The agreement lives on between the bank, now called Farm Credit of Texas (FCBT), and the Texas A&M University Real Estate Center (REC), the nation’s largest publicly funded organization devoted to real estate research. The center tracks trends in land prices, tract sizes and sales volumes by analyzing information provided by the bank
To Understand Trends in Rural Land Sales, Look to Decades of Data From Farm Credit and Texas A&M University
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