How To Understand Nebraska Agland & Residential Interest Rates - 2023!

By
Real Estate Broker/Owner with Mike McCann - Broker, Mach1 Realty Farm & Commercial Land Broker-Auctioneer Serving Nebraska
Hi All,   
 
The following is an email I wrote to my agents regarding interest rates and how it pertains to Nebraska prices.  Feel free to share if you want. Mike
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Interesting article below my blog explains higher interest rates from a Nebraska Ag angle...please take time to read as I thought it was some great reading.  Mike McCann Mach1 Realty Sells another Nebraska Farm
 
Higher interest rates absolutely makes it more difficult to buy and sell in our industry...in all facets...residential, commercial, and agland. I will concentrate on residential and agland today.
 
This will definitely be an interesting year for real estate. 
 
Please note that current home mortgage rates are in the 6% range and are changing up, or down, daily. Pay attention to them!!  (February 8, 2022) Please check current interest rates with your lender...if possible, daily.
 
In residential, the higher interest rate means it is harder to find the entry level buyers with the 
Mike McCann Mach1 Realty Nebraska
 buying power and desire to purchase smaller + more   expensive Versus staying as a renter. This will impact   move up buyers as well.  
 
 I also am concerned that current entry level   home   owners will find it increasingly harder to   sell due to   lack of equity in their home if the   markets soften and   they appear to be doing so   in some areas.  This can/will eventually trickle   up to higher end sellers like the homes shown in this photo.
 
This also means: condition versus price becomes even more critical. Homes need to have a short honey do list and any major and most minor repairs done or expect a less than full price offer and inspection or appraisal issues/requirements!
 
In agland, I believe the buyers with deep pockets will be the main focus of land purchases and those with little available cash will not be the buyers simply due to interest rates versus commodity prices.   A case of the big getting bigger if you will.
Mike McCann Mach1 Realty Howard County Nebraska Land Sale
 
I hope this is not true and I am wrong as we need smaller farmers and younger farmers to be able to purchase agland. (That is a blog for another time.) 
 
I have not seen Nebraska agland values drop...yet...but that may be coming soon.
 
Why? Cost versus profit!
 
IE: Cost of land (taxes, rent/land payments, insurance) and input (seed, fertilizer, planting, fuel, etc), and cost of maintaining to maturity of the crop (water, tilling, disking, etc), and harvest costs (cost of combining, fuel, freight costs to elevator or bins, etc) and equipment repairs/maintenance Versus Income of harvested crop.  
 
Luckily, current commodity prices today for corn in Nebraska  is in the $6.75 to $7.25 per bushel range and beans are in the $15.25 range for March 2023 delivery.
 
However, December 2023 delivery is about 15% less.  That could go up or could go down.   We might see more early contracts for fall harvest than in recent years.
 
No matter what...whether you are a real estate agent or broker...or in a related field for any type of real estate, expand your knowledge base and understand what is going on in your area!
 
Yes...cash buyers do exist...but I know very few who will/or can leverage actual 6 or 7 figures of cash versus getting a loan.  I cannot stress how important it is to understand the lender rates and any restrictions. 
 
So pay attention and educate yourself as rates and prices are changing daily!! So should your knowledge!
 
Feel free to share this email with your clients.  If you have questions or want to talk with me...give me a shout.  Let's have a great year in spite of the Feds!! 
 
Hope you are having a great week!  Mike   Check out the article here:
Posted by

 

Mike McCann Nebraska Land Broker This has been Mike McCann...Nebraska Land Broker...Coming to you from the Farm Land of Nebraska and America!! Visit me at www.mikemccann.com to learn more about the agricultural and farm land for sale market. 

Many farms For Sale in Nebraska are not listed publicly...please call, text, or e-mail with your questions, wants, and needs!

Mike is your Ag, Farm, and Auction expert throughout Nebraska!

308-627-3700 and 800-241-3940 call or text me at these numbers or

mike@mikemccann.com for easy e-mail access! Mike McCann Nebraska Land Broker

 

Comments (3)

Mike McCann Nebraska Land Broker
Mike McCann - Broker, Mach1 Realty Farm & Commercial Land Broker-Auctioneer Serving Nebraska - Kearney, NE
Farm & Commercial Property For Sale 308-627-3700

To all who have gotten this far.  When I hit the send button all fonts were the same and it looked great.  When the blog loaded...something happened and it all changed.  I will work on getting it "fixed" if possible.  Mike  UPDATE:  AR system will not allow me to correct font issues. 

Feb 08, 2023 11:48 AM
Kat Palmiotti

Mike McCann - Nebraska Farm Land Broker - the fonts look fine on my screen!

Feb 09, 2023 05:00 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

This is a good overview of some of the issues with residential purchases and agland purchases. It's important to know there are a lot of ongoing costs with farmland that need to be factored into the equation!

Feb 09, 2023 05:01 AM
Mike McCann Nebraska Land Broker
Mike McCann - Broker, Mach1 Realty Farm & Commercial Land Broker-Auctioneer Serving Nebraska - Kearney, NE
Farm & Commercial Property For Sale 308-627-3700

Thanks for the shout out Kat Palmiotti !!  I am glad the fonts look ok on your end.  And yes...input cost are crazy expensive this year.  Have a great day!!

Feb 09, 2023 09:04 AM