Whether or not Louis Glickman, the 20th century New York real-estate mogul, ever stepped foot in Arkansas is unclear. What is clear, however, is that the famous quote so often attributed to him certainly applies to the Natural State.
“The best investment on Earth is earth,” the quote reads.
From Ponca to Parkdale and all the row crops, piney woods, hills, hollers and rivers in between, land brokers would almost certainly agree. Markets may fluctuate; wars, weather and politics may wreak havoc; but land — good ol’ dirt between the toes — will likely be the last investment that loses value.
Arkansas is filled with valuable rural real estate, and the market for agricultural and recreational land has stabilized following a COVID-19 pandemic hiccup that saw low inventory and higher prices.
Jeremiah Moore, who represents District 61 in the Arkansas House of Representatives and launched Moore Land & Farm in Clarendon earlier this year, said he believes the Arkansas land market finds itself in a unique position.
“We’ve gone from historic low inventory and high prices during the post-pandemic era to where there’s now more inventory and prices have seemed to stabilize,” he said. “Overall, the market is still very strong in some areas, particularly in smaller parcels that are 40 to 80 acres.”
Moore cited a study by the University of Arkansas system that looked at farmland values from 1998 through 2018. The study found that Arkansas farmland increased by 5.5 percent on average year over year.
“It’s what you do with it that matters,” he said. “The recreational market hasn’t seen a downturn, but there have been some recent farm auctions that raised some eyebrows. The bottom line is that there will always be a market for land.”
Robert Eason
Robert Eason, principal broker and owner of Arkansas Land Co. in North Little Rock, said farmland and recreational properties continue to hold their value and remain a solid long-term investment, but pricing remains the biggest obstacle to those looking to enter the market.
Pulaski County, Recreational Land, Robert Eason / Arkansas Land Company
“Most row-crop land values have increased significantly, while returns have fallen below historical averages,” he said. “Investors often have to generate additional income through recreational and energy leases to make properties cash flow. This has priced much of the market out of reach for average buyers simply looking for a place to hunt and enjoy with their families.”
St. Francis County, Agricultural Land, Robert Eason / Arkansas Land Company
The rates on current U.S. Department of Agriculture Farm Service Agency loans range between 4.75 percent and 5.75 percent, while rates for recreational-use properties are floating between 6 percent and 11 percent.
Gardner Lile
Gardner Lile, president of Lile Real Estate in Little Rock, said the higher rates combined with the challenges of the current agricultural economy are keeping some prospective first-time buyers out of the market.
Agricultural Land, Lonoke County, Gardner Lile / Lile Real Estate
“Buyers seem to have slowed down with the uncertainty from the war and talks of potential increase in interest rates,” he said. “The agricultural economy is depressed from downward pressure on commodity prices over the last two to three years, and input costs have stayed elevated or increased.”
Land, whether for ag or recreational use, remains the solid investment it has always been, he said.
“Land remains a great investment for investors looking to allocate funds to hard, tangible assets that produce safe and steady returns,” he said.
Marion County, Recreational Land, Gardner Lile / Lile Real Estate
Lile said landowners see more ROI if they do not ignore the property. For example, owners of recreational property should always look for ways to improve wildlife habitat, and farmland owners should look to improve the efficiency and irrigation capabilities through land leveling, drainage work and the installation of new re-lifts and wells.
“Improving access and internal road systems benefits both recreational and agricultural properties,” he added.
Curb appeal is not just for residential real estate agents working Chenal Valley or Clear Creek. It can go just as far on the farm or at the duck club as it can in any of the state’s most prized suburbs. That can start with keeping roads, ditches and entryways maintained, Eason said.
“Too often, I’m asked to give an opinion on a property and find myself recommending that the owner clean up debris or bushhog overgrown areas,” he said. “Many investors purchase land instead of homes or improved properties to reduce maintenance responsibilities, but some don’t realize how much value can be lost when an open field turns into a sweetgum thicket. Mowing annually is far less expensive than mulching or bulldozing later on. When discussing hunting properties, keep a detailed log book. Harvest records are a key factor when pricing recreational properties.”
Ben Wellons
Ben Wellons, president of Little Rock-based Wellons Real Estate, said his firm is seeing more buyers focused on experience-driven properties.
“Buyers today are thinking beyond just acreage; they’re focused on lifestyle, stewardship, privacy and long-term value preservation,” he said. “Arkansas remains incredibly attractive because it offers a rare combination of natural beauty, recreational opportunity and relative value compared to many other markets.”
Crittenden County, Agricultural Land, Ben Wellons / Wellons Real Estate
Moore said the first things he considers when buying a property are the ability to irrigate, the soil type and, of course, location.
“Whether you’re buying or selling, find yourself an honest broker who will shoot you straight,” he said. “For buyers, they can set you up with the right lenders, give unbiased and informed information that might not be on the listing description, and help guide you on how much to offer. For sellers, making sure you have a broker that will put your best interest first can often be much more profitable than doing it on your own.”
Moore added that buyers not paying cash should find a lender that understands their goals. He also noted that the state ranks among the lowest 15 percent in terms of property taxes.
“Some banks focus more on business and home loans. Others are more comfortable with ag and recreational loans. Having a lender that understands your vision is important,” he said.
Scott County, Recreational Land, Ben Wellons / Wellons Real Estate
Property taxes in Arkansas remain among the lowest in the nation. Farmland property taxes are assessed at 20 percent of a property’s use value. Moore said Arkansas property taxes rank among the bottom 15 percent of all states.
“From my information, the only neighboring state with lower property taxes is Louisiana,” he said. “Local millage rates will vary by school district, but for raw land, our taxes are usually more affordable than the surrounding states.”
Eason said he tells first-time buyers to keep an open mind. Many want to buy the land and realize their full vision right away, but he said patience often pays.
Jeremiah Moore
“Purchasing a property that is not already 100-percent developed the way you want can often provide greater returns than buying something already fully improved,” he said. “Buying a subprime property can offer discounted pricing, and improving it yourself can create significant monetary and personal value over time.”
Farmland makes up most of the Arkansas Land portfolio, and Eason said it is unfortunate to see how the current farm economy is unfolding. Landowners who lease their land for farming should make sure they have current written leases with their tenants, he advised.
Phillips County, Agricultural Land, Jeremiah Moore / Moore Land & Farm
“In many cases, landowners are first lienholders on a growing crop, and those leases should be filed at the courthouse in case an unfortunate bankruptcy situation occurs,” he said. “Personally, I have offered concessions to some of our farmers because I value those relationships. I do not want to lose good farmers or face the possibility of having no farmer at all.”
Despite the depressed ag economy and other global concerns, Arkansas land remains a sound investment and, as Eason noted, the state is “one of the most affordable places in the country to own land from a property tax standpoint.”
Eason added that his firm is seeing an increase in available inventory for the first time since COVID-19.
“Historically, we have maintained an average of around 50 listings throughout the year,” he said. “Currently, our firm has more than 80 properties listed and available for purchase. The availability increase as a whole is due to increased motivation to retire from farming but also because properties are priced higher than market value.”
Nevada County, Recreational Land, Jeremiah Moore / Moore Land & Farm
Though a sound investment, Arkansas land is not the office aloe vera plant that requires very little attention. Nothing worthwhile comes easy, after all, and the ROI many Arkansas landowners extract from their properties is quite worthwhile.
“The saying goes, spend money to make money,” Moore said. “This is true when it comes to land. Land isn’t a static asset. It takes proper management. If your goal is to sell a property within a year or two, I would definitely spend the money now. If your goal is to maximize the productivity of the farm, making sure you have proper irrigation is step No. 1.”
Both farm and recreational properties have sold for upward of $20 million over the past year in Arkansas.
“Farm and recreational properties continue to hold their value and remain a solid long-term investment,” Eason said.
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