Iowa land values continue rising, with the largest gains in top quality farmland. That's according to a March 1, 2012 survey by Iowa Farm and Land Chapter #2 Realtors Land Institute.
Participants in the survey are specialists in farmland and are asked for their opinions about the current status of the Iowa farmland market. Participants were asked to estimate the average value of farmland as of March 1, 2012. 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.
The results of these surveys show a statewide average increase of cropland values of 10.8% for the September 2011 to March 2012 period. Combining 10.8% rise with the 12.9% gain reported in September 2011 indicates a statewide average increase of 23.7% for the year from March 1, 2011 to March 1, 2012.
Land values rose in all nine Iowa crop reporting districts. The districts varied from a 9.0% increase in northeast Iowa to a 12.9% increase in southwest Iowa for the September 2011 to March 2012 period. Factors listed as contributing to higher farmland values include:
- Strong commodity prices
- Favorable long term interest rates
- Limited amount of land offered for sale
- Lack of stable alternative investments
- Favorable livestock prices
- Fear of inflation
Concerns that could affect farmland value in the future include:
- Higher input costs
- A potential rise in interest rates
- Larger amounts of land being offered for sale
- Lower commodity prices
- Continued uncertainty of the U.S. and world economies
March 1, 2012 estimated values per acre by land quality are:
- High quality, $9,370, up from $8,369 on Sept. 1, 2011
- Medium quality, $7,148, up from $6,473 on Sept. 1, 2011
- Low quality, $4,879, up from $4,469 on Sept. 1, 2011
- Non-tillable pasture, $2,418, up from $2,298 on Sept. 1, 2011
- Timber land, $2,064, up from $1,977 on Sept. 1, 2011