Farm land values strong and rising

The real estate market for farms and ranches is a great deal stronger than that in residential or commercial property.

Farms are sold on the basis of the income they'll produce, and with strong grain prices--particularly corn--land values have risen between 11 and 17%, according to the Federal Reserve. Ranches have stayed strong too, as cattle prices are at profitable levels, but are probably on a less steep trajectory than farms in the cornbelt.

The credit crunch definitely affects the farm and ranch real estate market, with loans-to-value of much more than 50% are hard to come by. The main action right now is in seller-carried financing.

This all has certain positive aspects for lovers of rural America and the American agrarian tradition. Speculators and investors seeking to convert rural lands into urban and ex-urban areas has slowed. Farmlands are selling more on the basis of what they will produce as farms, rather than as real estate developments.

It is a small trend so far, but there are people moving back to the country to farm and ranch, since we are in a profitable period for doing so. It isn't necessarily easy, with high input costs, but is more possible to do than in many years.

It is a bright outlook right now, for rural real estate.