Terrain Report — Bifurcation in North Coast Vineyard Values

The market surrounding vineyard values has been somewhat stormy as interest rates have increased significantly, grape production has been hampered by natural disasters and drought, the growth in wine sales has slowed, and coming water legislation remains top of mind. My research finds that average vineyard valuations in Napa and Sonoma counties remain mostly stable, and the value of top end, high-quality vineyards increased modestly in 2022 from year-ago levels.

To quantify the changes in vineyard values, vineyard sales data was broken into prime and secondary locations. Prime locations include vineyards that are young-to-mid aged, conducive to high value grape varieties, have high existing grape contracts or bottle pricing, and have a strong reputation. The sales data was then broken into quartiles and the highest and lowest sales were sorted out to get a ‘most common’ range of sales using the middle quartiles. The mid-quartile method helps establish the broader trend of a host of sales over the course of the year, though, it should be noted that some sales in 2022 were well above the most common range.

Looking at the prime market in Napa County, the average value increased very slightly from the previous year, the third consecutive increase.  The top end of the mid-quartile range increased about 7 percent from a year ago, the fifth consecutive year-over-year increase. However, the bottom end of the mid-quartile range declined from the previous year.

In secondary locations in Napa County, the value of vineyards in the top end of the range increased in value by about 11 percent, and the lower end of the range declined in value about 3 percent. The average value remained largely unchanged. The bifurcation between the top end and lower end in both prime and secondary locations gives a nod to choosier investments as the cost of borrowing and farming have increased.