Land values skyrocket in parts of Wyoming

2013-06-24T00:00:00Z 2013-06-24T00:05:11Z Land values skyrocket in parts of WyomingBy KYLE ROERINK Casper Star-Tribune The Billings Gazette
June 24, 2013 12:00 am  • 

CASPER, Wyo. — Wyoming ranchland values increased by 4.7 percent in 2012, according to the U.S. Department of Agriculture. The average price was $450 per acre — up from $428.85 in 2011.

However, the state's prices are the lowest in the Mountain West region thanks to a lack of fertile crop land, said Steven Gunn, section leader of the USDA’s National Agriculture Statistic Service in Denver.

Idaho leads the region with an average value of $1,210 even though it fell 8 percent between 2011 and 2012. South Dakota’s skyrocketed 25.5 percent to $590 per acre and Nebraska’s shot up 24.5 percent to $660 in that time period. Colorado and Utah saw no increase in their values. Montana rose 7.5 percent to $570 per acre.

The average prices are just a starting point, Gunn said.

Land with the potential to develop energy drives up prices in the state, he said, but scenic views and proximity to the wilderness are what bring people into Wyoming.

“If the land were being graded on its agricultural value the prices wouldn’t be rising,” said Jim Magagna, executive vice president of the Wyoming Stock Growers Association.

Agricultural value means very little to the price of land parcels in Wyoming, he said.

In the past few years there’s been a rebound in the market, said Eric Loloff, owner of Running Horse Realty in Powell. People are coming with pockets full of cash because Wyoming has a friendly tax environment and billions in state coffers and the citizens love their freedom, he said.

He’s recently sold land in Powell for anywhere between $3,000 and $6,000 an acre.

“There’s a tremendous demand right now for farm ground and tremendous demand to get to Wyoming,” he said. “The realtors I talk to are having a hard time keeping anything on the market.”

Loloff said the wives come with AR-15 rifles and the husbands come with AK-47s.

“They’re coming here because they feel like Wyoming will stand up to the rest of the country,” he said.

In the western part of the state, the close proximity between private and public lands offers a big draw for interested buyers, Magagna said. Parcels are smaller, but the fear of a subdivision plunking down next to a private property owner is minimal, he said.

“Then there’s the higher amenity value,” he said. “It’s not just sagebrush-covered hillside. The closer you are to a mountain range, you’ll see an increase in price,” Magagna said.

The high demand for scenic land makes it hard for people in the ranching and farming industry to purchase parcels that receive moisture throughout the year, said Bill Bensel, a rancher and organizer with the Powder River Basin Resource Council.

Land is selling for $7,000 to $9,000 per acre in the northeast part of the state, he said.

“It’s virtually impossible for people to start getting into ranching unless they have the assets, their family passes it down or they marry into it,” he said.

The value of the ranch is generally tied to the amount of precipitation the area receives, Magagna said.

“The wet land is where the real estate developers and the ‘McMansions’ want to be,” Bensel said.

The northwest and northeast corners aren’t the only desirable spots in the state.

Five miles from the former boom town of Medicine Bow, a ranch just sold for $20.9 million.

A large family from the Midwest purchased the Medicine Bow River Ranch on May 31. It’s 77,000 acres of water, wildlife and pastures to feed cattle, said B. Elfand, a broker for the Montana-based Fay Ranchers who worked on the deal.

The ranch has been idle for the past few years and the family wants to operate it in an environmentally stable way, Elfand said.

There are natural gas and crude oil wells on the property, as well as nine wind turbines, he said.

“The biggest energy potential on the ranch is wind,” he said.

The closing of the deal suggests a renewed faith in using land to balance financial portfolios, Elfand said.

“This is one example of the strengthening ranch real estate market,” he said. “Things seem to be headed in the opposite direction they were going a few years ago.”

Southern Cross Ranch LLC owned the property until 2007, when an agriculture money lender, Texas Finance FLCA, had to foreclose on the property.

The property sold for $271.4 per acre -- close to half of the average ranchland rate in Wyoming.

The larger the parcel, the smaller the price per acre, Loloff said.

Wyoming has the largest acreage averages in the nation, helping to contribute to the state's smaller average values, Magagna said

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