Land Sale of the Week: Odd Shape a Discount in Delaware Co., Iowa?

May 1, 2014 11:56 AM
 

 

Mike Walsten

A recent auction in Delaware County, Iowa had some wondering if the shape of fields had an impact on the selling prices. The 83-acre farm was auctioned April 23. It was located southeast of Delhi and featured 80 tillable acres. But the field shape was irregular with only one straight side. The other three sides meandered along tree lines, pasture and a small creek. The soil quality was above average rated at a Corn Suitability Rating (CSR) of 71.6 versus a county average of 63.0. The revised CSR2 was 65.3. There were no buildings or other improvements on the farm. The farm sold for $9,550 per acre, which is about $133.4 per CSR point.

For comparison, a 155-acre farm sold earlier in April in Delaware County for $11,400 an acre. It had 152 tillable acres. It carried a CSR of 81.7 and a CSR2 of 89. The field shape were straight, making it very easy to farm. The selling price amounted to $139.5 per CSR point. Just looking at the $/CSR value, it would appear the odd shape resulted in a 4% discount in the price. But in my mind, the opportunity to own 155 acres of 81.7 CSR ground in one easy-to-farm tract outweighs all else. While the irregular shape on the lower CSR ground is obviously not as attractive as the regular shape and high CSR ground, a discount of "only" 4% under the $139.5/CSR point marked in the 155-acre farm is not much of a discount at all.

Both properties were handled by Troy Louwagie, ALC, Hertz Real Estate Services, Mount Vernon, Iowa.

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