Previous research has reached inconsistent, if not paradoxical, conclusions regarding the impact of conservation easements on farmland prices. Expectations of price reductions, strongly grounded in economic theory, are not always observed.We develop a hedonic model to examine the sale prices of 325 New Jersey preserved farms. We find strong evidence that residual development options retained under farmland deeds of easement have significant and positive effects on preserved farmland prices. This suggests that appraisals are undervaluing deed-restricted farmland, resulting in possible overpayment for conservation easements. This may explain the limited price differentials researchers have observed between preserved and unpreserved farmland.