Author’s note: Early in the year, I traveled to Missoula, Montana, for a winter vacation, but a contact put me in touch with a few people in the real estate industry and much to my surprise I came away with a couple of interesting stories. This column is the first of two.

For a while it seemed that anyone with a lot of money, from Hollywood stars to business moguls, wanted a piece — make that a very large piece of — America, and they came west looking to buy their own ranches. Many, following the lead of flamboyant media entrepreneur, Ted Turner, looked to acquire in Montana.

During the bubble years, investors couldn’t acquire Montana ranches fast enough.

William McDavid, who opened the Missoula office of Hall and Hall in 1996, remembers those years fondly.

"Before the recession, people were standing in line to buy," McDavid says. "There were bidding wars for multimillion-dollar properties."

Hall and Hall does a lot of different things as a real estate company, but to this day it is known as the premier brokerage for ranch lands with offices mostly throughout the west.

It must have been mighty tough to be so specialized, because all that desire for western dirt dried up like grasslands during a drought as the country pushed into the Great Recession. During the heart of the economic downturn, ranch land transaction volume in key states such as Montana dropped 80 to 90 percent.

As any real rancher knows, you get good cattle and crop years and you get bad years (not a concern for the wealthy dilettante!). The same holds true for real estate, but bad years don’t last forever, and then the markets change.

Five years after the beginning of the recession, good times are back for ranch land brokers.

"We always talk about how great the market for ranches was before 2008, yet 2012 was the second year in a row that was the best ever for Hall and Hall," says McDavid. "Our gross sales, largely based on pure ranch properties, were better than ever and that would include during the red-hot days at the end of the 1990s."

He adds, "buyers today are the same ones we saw before the recession: CEOs, movie stars, and private, wealthy people. The only difference now is that we are seeing more energy money."

The N Bar Ranch, which consists of more than 60,000 acres in the foothills of the Snowy Mountains, recently went for $45 million. Dana Ranch, also nearly 60,000 acres, but with only modest improvements (buildings), also sold for $45 million.

Still up for sale in the $25 million range are the Grizzly Creek Ranch near the town of Gardiner and OW Ranch near a place called Quietus.

These are really the extreme end of ranch land properties. Most ranches are much, much smaller and sell closer to $2 million.

Keith Lenard, who works with McDavid, gave me a quick rundown of ranch types. There are legacy ranches of tens of thousands of acres, "with fly-fishing streams, private elk herds and extraordinary levels of privacy, seclusion and natural beauty," he says. Then there are "boutique ranches, often with high-end improvements (residences) on small acreage. Both legacy and boutique properties are further graded as A, B or C. There are legacy ranches that are just holding the earth together and boutique ranches that are just not that nice."

In 2012, Lenard sold six ranch properties. In his best deal, he represented the seller in a $15.5 million transaction in the Missouri Breaks area of Montana. The ranch totaled 100,000 acres. The listing price was $18 million.

McDavid sold five properties last year. His biggest deal was in California, where he represented the seller on 25,000-acre ranch near Los Molinos that was listed at $29.5 million. Without being specific, McDavid said the ranch sold for below asking price.

Lenard had a good year in 2012, but it took awhile to get there. He joined Hall and Hall in 2008, just in time to see the bottom fall out of the ranch market. It didn’t come back again until mid-2010.

"What happened was, the very best properties held value and continued to trade, albeit at a slower pace," he says. "Everything else declined in value anywhere from 20 percent to 50 percent."

Even with a couple of busy years in ranch sales, prices have not returned to pre-recession levels, still off an average of 20 to 30 percent — although some firming up is occurring.

"In 2010, the disparity between asking price and selling price was 18 percent and that improved to 8 percent in 2011," says McDavid. "We haven’t yet run the numbers for 2012. My guess is the disparity will be around 7 percent to 8 percent."

As with any type of real estate, better numbers depends on location. Montana’s Bitterroot Valley, which was a prairie fire of activity before the recession, hasn’t experienced recovery as yet. The Bitterroot was mostly a boutique ranch region and prices were over-inflated, says Lenard. "Prices dropped 35 percent to 40 percent and have not recovered."

There are a number of quirks in the ranch market. For one thing, there have been few foreclosures because many deals are done with cash. Secondly, it is one of the few real estate sectors where quality of residence is of minor importance. Indeed, high quality property that is priced right and is unimproved (few structures) has slightly broader desirability than an improved property.

In the bubble years, a lot of ranch buyers succumbed to ego-developments and built grandiose lodgings. These have not proved to be very good investments, although there are a number of buyers who like to have a good manse right there at time of purchase, so they can move in right away and not have to deal with building a brand new home on the range where the deer and the antelope play.

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