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Farm Land Value Continues to Go Up
DAVENPORT, IA (CBS 2/FOX 28) -- The value of cropland across the state of Iowa continues to be on the rise, but slowing a bit.
The Land Trends and Value Survey, presented by the Iowa Farm and Land Chapter #2 REALTORS Land Institute, reported a statewide average increase of cropland values of 10.6% for the year from September 1, 2012 to September 1, 2013. This follows an average increase of 18.5% for the year from September 2011 to September 2012; and an average increase of 32.6% for the year from September 2010 to September 2011.
Overall, the strong upward movement in land prices has leveled out even though we have seen growth in values over the past six months especially in the East Central District, which covers much of the local market area.
"Clearly the decrease in commodity prices and the potential for highly variable yields are slowing the increases in land value especially in medium to lower quality farms," said Eric Schlutz, Realtor with Ruhl Farm&Land and Muscatine Manager for Ruhl&Ruhl REALTORS.
The survey also attributed the current land values to an increase in long-term interest rates, 2013 growing conditions, a lack of stable alternative investments, large amounts of cash on hand and the limited amount of land on the market.
For the survey, participants are asked to estimate the average value of farmland as of September 1, 2013. These estimates are for bare, unimproved land with a sale price on a cash basis. Pasture and timberland values were also requested as supplemental information. Seven of the nine Iowa crop reporting districts showed an increase in the last 6 months.
For local experts, the survey results were not surprising, said Dennis Stolk, Realtor with Ruhl&Ruhl REALTORS.
"The best strength in the land market continues to be in the high quality, all tillable parcels, with some easing of the growth in values of the lesser quality parcels, as well as recreation land," Stolk said. "Future direction of land values will be highly dependent on commodity prices for corn, soybeans, hogs and cattle, as well as interest rates and the general overall economic trend.
"We are positioned in eastern Iowa and western Illinois to see good stable land values and do not anticipate a drastic movement downward or upward."
Ruhl Farm&Land, a division of Ruhl&Ruhl REALTORS, is focused on the sale, purchase and marketing of land, farms and acreages.