Once a year I do a lengthy feature about the value of Napa Valley vineyard lands. This year’s prices have not disappointed and seem to remain impervious to both the real estate bubble and the economic downturn. The price of grapes has also recovered fully from the downturn and subsequent four year glut of grapes for sale of this truly marvelous crop. Grape prices for 2013 hit an all time high.
In case you would like to compare what I wrote the past two years on this subject, here is the one I did last September, How much for an acre of Napa Valley vineyard land?d and prior to that was May 2011, Have You Ever Wondered What the Value of Vineyard Lands Are in the Napa Valley or Other Areas of California?.
So far this year, vineyard prices for Napa Valley grape land has remained stable to up a bit most likely due to the improving economy. In a recent article in the Napa Register by Jennifer Huffman, Napa ag lands remain most expensive in U.S., she stated the price per acre here for vineyards was $50,000 to $300,000, the same as 2012. However, I have heard from several people in the wine business, it is nearly impossible to find decent plantable land for $50,000 per acre any longer.
I am currently working with two buyers looking for small wineries between $3,000,000 to $8,000,000 and there is nothing I have been able to find them to purchase. Though each has different requirements, the minimum for both is the winery have a permit that allows tasting and tours open to the public. These permits are by appointment only for Napa County no longer issues winery permits for open tasting as tours as most visitors encounter at the long established wineries which line the main road for such, Highway 29. Recent winery permits are highly tailored for each specially location and have specific limitations on the number of daily visitors, number of events allowed and what type.
As to recent winery purchases, I know of about a dozen over the last two years and many of these and quite a few of the vineyard parcels are being bought by foreign buyers, especially Asians including China, Korea and Hong Kong. If you wonder what the the highest price per acre paid is, check out my two previous articles on this subject above.
Here are a few highlight from the Jennifer Huffman article:
An acre of Napa Valley vineyard can sell from $50,000 to $300,000, depending on location and the all-important concept of terroir. To compare, that same acre of grapes planted on the Sonoma County side of the Mayacamas Mountains would typically fetch less than half of that.
Premium cabernet sauvignon, “the hallmark of the Napa wine industry,” drives prices in the most prime locations including the valley floor areas of St. Helena, Rutherford and Oakville, as well as the surrounding zones such as Pritchard Hill, Howell Mountain, Stags Leap and Spring Mountain, said the ag report.
2012 was a “banner year” in terms of the number of properties sold. The so-called “lifestyle buyer” returned to the market, the report said.
Forcey described three such purchases, all on Oakville Road. Surrounded by Rudd Winery, PlumpJack, Harlan Estate and Screaming Eagle wineries, one parcel of 3 acres sold for around $5 million. One horse ranch sold for $8 million.
Grape supply continues to be a major concern in 2013, with “most wineries concerned there are not enough grapes to keep up with growing demand,” the report said. Market demand and values should remain strong with grape prices, land and vineyard values trending higher, according to the report.
“2013 is definitely on pace to blow 2012 out of the water in both numbers and values,” Forcey said.
Vineyard Lands Prices per Acres
As with everything, all lands are not created equal. This is true especially with vineyards where prime acres sale for more than $300,000 per acre and as I said above, lesser properties are going for about $75,000 per acre. Here is a repeat of the differences in vineyard land values based on the quality of the land from the 2012 report by the California chapter of American Society of Farm Managers and Rural Appraisers.
- Vineyards in prime areas: $225,000 to $300,000 per acre
- Vineyards in secondary: $90,000 to $165,000 per acre
- Vineyards in fringe areas: $35,000 to $75,000 per acre
- Plantable land (countywide): $25,000 to $175,000 per acre
Again it comes down to location for the value of an acre of unplanted vineyard lands with the Napa Valley still leading other grape growing regions of California. Here are the county to county comparisons on a per acre basis for vacant land, only for the plantable portion.
- Napa County between $75,000 to $200,000
- Sonoma County between $60,000 to $140,000
- San Luis Obispo and Santa Barbara counties between $18,000 to $75,000
- Mendocino County between $14,000 to $70,000
Grape Prices per Ton
Prices paid for a ton of 2012 grapes are up over 2011 and the value of the grape crop for 2012 Napa County is a new record high. The number one crop by tonnage is still Cabernet Sauvignon which accounts for 39 percent of the entire Napa Valley grape crop. The average price for a ton of this fabulous grape for 2012, $5,101 per ton.
The other top produced Napa Valley grapes and average price paid per ton, Chardonnay $2,363; Pinot Noir, $2,485; Zinfandel, $3,024; Cabernet franc, $5,053. For a complete list of the tonnage and the prices of all varietals grow here, go to Jennifer Huffman’s article, Napa’s 2012 grape crop sets records. According to Jennifer, the highest price paid per ton in Napa County was $5,500 for an Italian varietal, refosco.
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