Rural land prices soar as people trade city for country

Tony and Leslie Wisdom were out property hunting, driving north on Interstate 5 on a spring morning when suddenly the freeway dropped into the sweeping flatlands of the Skagit Valley.

"It was like, 'Wow!' It was so colorful," Tony said. "There were green tractors in the fields. The tulips were in bloom. It was just amazing."

For the Wisdoms, the trip marked the beginning of a radical change — a move from the big city to the country. Their decision to pack up and leave Seattle in 2004 made them part of a migration of people who have cashed in on the rise in housing prices in the Seattle area and California and bought farms in Western Washington, helping to drive up farmland prices in the process.

"We've seen farmland values rise dramatically, particularly over the last couple of years," said Mike Shelby, executive director of the Western Washington Agricultural Association, which represents local farmers.

Shelby estimates that cropland prices have jumped 30 to 50 percent over the past three years in Skagit, Snohomish and Lewis counties, a result both of a drift of people from the cities and of other social and economic changes.

In Whatcom County, near the Canadian border, county Assessor Keith Willnauer said some acreage has tripled in value in recent years.

"That's off the chart," he said, noting that the weaker U.S. dollar is making land purchases in Washington more attractive to Canadian buyers. Many of those buyers, he said, are berry farmers who are being pushed out by a wave of retirees from across Canada who are moving to the Vancouver, B.C., area, attracted by its moderate climate.

In Skagit County, some of the recent transplants buy a 40-acre plot of farmland for about $300,000, building a house on it and leasing out the farmland, said Wes Hagen, Skagit County chief deputy assessor.

Other newcomers have bought smaller rural lots with vintage two-story Victorians or modern bungalows on them on the fringes of towns such as Mount Vernon and Burlington. Those who can afford it build so-called "McMansions."

"A $500,000 house [on 5 acres] here could be a $1 million house" in the Seattle area, Hagen said. "A lot of retirees are moving in."

Four years ago, the Wisdoms bought a 15-acre wheat field near Burlington, with an oversized mobile home, a shed and two friendly barn cats, for $240,000. It also came with a view of the Cascades. They sold their home in the Wallingford neighborhood for twice the price.

The couple then built a 2,500-square-foot home with a gambrel roof to resemble a barn, and settled in.

While Leslie did marketing work from home, Tony switched from his city job of property management to growing broccoli and potatoes. The change took him back to his boyhood roots growing up on a farm in Eastern Washington.

"It's hard work," he said. "But I'm outside a lot and get to work with my hands."

The Wisdoms, citing personal reasons, said they are now planning to move to the Washington coast and have put their property up for sale.

Other factors are driving up farmland prices in fertile areas of Western Washington, according to county officials and farmers' organizations. Among them are the overall rise in food prices and increased agricultural exports from the state.

Rising food sales are adding value to cropland at the same time its supply is shrinking. Some farmland is being converted to housing and commercial developments, while other open land is being set aside for environmental reasons, such as to preserve wetlands and estuaries.

The rising land prices are a cause of concern for longtime farmers in the area.

Higher land values mean higher taxes, cutting into their cash flow. It also limits their ability to expand their acreage.

Steve and Susan Schuh, who have been farming near Mount Vernon for 40 years, say local farmers wouldn't expect to pay $10,000 an acre for farmland, yet recently a retired man and his wife driving an expensive sport-utility vehicle dropped by and said they would happily pay $20,000 an acre for a plot in the area.

"He said, 'What's money for if not to spend?' " said Susan Schuh.

That clinched a decision for the Schuhs. They bought a neighboring 40 acres they'd been wavering over, while they could still afford it.

That meant putting off their own retirement, but it ensured they could keep their roadside vegetable stand on the parcel next door and remain in the country.