Date: December 13, 2005
Norman C. Wheeler & Associates has begun to compile land value information relative to the Montana land market for preparation of their annual land survey, "For Landˆçs Sakes." The For Landˆçs Sakes Survey will be available on the website in late January, and as in yearˆçs past, it will describe and chart trends related to land values throughout western Montana. As with past land studies, the value data will be reported in various datasets and categories that distinguish values between recreational lands and larger agricultural units.

In the Montana land market there has been a substantial increase in demand, offset by a decreasing supply of property over the past 24 months, which has caused sharp price increases over the past 12 to 18 months. Data being compiled at this time related to recreational lands indicates that in total approximately 168,000 acres of recreational land have traded in the area of the land study in 2005. These lands indicate overall per acre values running at approximately $2,366 per acre on an unimproved basis.

In 2004 just over 200,000 recreational acres traded within the study area at an average value of $1,947 per acre. The current information would indicate an upward value trend within the general recreational market of approximately 24% on average.

The 2005 average land values are substantially up from average land values indicated in 2003 within the recreational land market. Data related to the study in 2003 indicated that approximately 250,000 acres of recreational land traded within the context of the recreational market, as identified in the land study at an average value of approximately $1,300 per acre.

What the sale data indicates at first glance is that values from 2003 to 2005 appear to have risen by as much as 83% over the past 24 to 36 months for lands related to the high amenity recreational land market. The transactions reported within the recreational database average from 2,000 to 4,000 acres overall, thus the primary sales contained within the database are larger parcel sales. The database and information reported does not include smaller tracts of land related to vacant land or subdivision, and the values indicated are only applicable to larger recreational properties.

As reported earlier this year, certain market areas have seen a substantial increase in volume. The White Sulphur Springs market in northern Meagher County has exhibited several lands sales in 2005 which total over 41,000 acres. These properties show an average value running at almost $1,300 per acre. This data is related to larger recreational land sales and does not include what are termed larger agricultural ranch units, or small-tract subdivisions. The volume of land sold in the White Sulphur Springs market in 2005 exceeds the total of such recreational lands sold in the area the previous four years, and the 2005 sales indicate an average value increase of approximately 35% within this market over the past 12 to 24 months.

Additional data related to specific markets, such as the Gallatin Valley, in which smaller tract sales are studied, indicate value increases running approximately 30% to 40% over the past 12 months. During 2005 to date, within the Gallatin Valley, there are 18 sales averaging 261 acres, selling at about $9,600 per acre overall on an unimproved basis. This compares with 22 sales in the valley in 2004, which averaged 211 acres each and reflected an overall unimproved value of approximately $7,163 per acre. Some sales within this database are considered to be recreational sales related to rivers and waterways associated with the valley, and other sales reported in the database are larger farms which are transitioning into suburban development related to the town of Bozeman, but overall the trends indicated for the lands in the area has substantiated and documented upward trends seen throughout the area.

An additional example of value movement in the Bozeman market is seen in sales related to million dollar/plus home sales. In 2003 six sales were reported, in 2004 there were 11 sales were reported. To date in 2005, over such 50 sales in this category are reported. In 2005 Norman C. Wheeler & Associates has added a substantial amount of sale information to its conservation easement database. New sales added to the database this year encompassed just over 56,000 acres of properties sold subject to conservation easement. The new conservation easement sales added to the database indicate an overall average loss related to conservation easements, at 36.92%. The rate of loss associated with the easements appears to be decreasing from average levels seen in previous years, which again is reflective of a constrictive market in which few properties are being exposed.

With improved weather conditions and cattle prices, the value associated with larger ranch properties have also showing strong appreciation and value gains in the last 12 months. Data related to larger ranch sales is still being compiled for the annual newsletter, and additional information related to trends apparent in the land market in 2005 will be available within the next 30 to 45 days.

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