Aug 5, 2009

Farm Real-Estate Values Post Rare Decline

According to an article in the Wall Street Journal, quoting government statistics, farm real-estate values fell for the first time in more than 20 years. The U.S. Agriculture Department said in its annual report that the value of all land and buildings on U.S. farms averaged $2,100 an acre Jan. 1, down 3.2% from last year. The decline in farm real-estate values was the first since 1987, the agency said.
For the details click here.

While the exact definition of farm real estate was not available in the article, it will be interesting to note the impact on major USDA lenders - like Chase - who has a significant USDA offering. Mortgage banking firms and brokers outside the MSAs are most likely to face the consequences of this decline - and it might result in lower eligibilities and possibly the creation of "declining markets" for farm areas as well.

Those with experience on USDA backed loans and/or facing the impact of the farm real estate declines can post their comments here.

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