Iowa farmland values remained exactly the same over the last six months, with low interest rates offsetting low farm prices and a pandemic reducing the number of sales but not changing the results of those sales very much, according to the state’s ag land real estate agents.
The REALTORS Land Institute-Iowa Chapter surveys its members every six months, and the latest survey showed that as of Sept. 1, the values had not really changed since March 1. High-quality farmland averaged $9,236 this fall.
“We think of the values being flat as a win,” says Elliott Siefert, a Realtor with Hertz Farm Services in Nevada and one of the Realtors conducting this fall’s survey. “There’s a lot of uncertainty out there.”
Siefert says that when the COVID-19 crisis hit hard in March everything in the land market just shut down for about two months. Since then things have started opening back up, but the volume of land being sold is down as more sellers decide to hold off in an uncertain market.
Farmland values had gone up just 0.1% the previous six months and about 0.8% the six months before that.
There has been an uptick in the number of non-local investors bidding on land in the state, and some timber land did better than low-quality farmland as investors looked to park their money somewhere other than the stock market, Siefert says.
The Realtors do not publish a statewide overall dollar figure on land values but do issue numbers for high-quality vs. low-quality land. The statewide average for high-quality land actually inched down a bit, from $9,265 to $9,236. For medium-quality land it went from $6,971 up to $6,975. For low-quality land it went from $4,658 to $4,686.
For non-tillable pasture it went from $2,917 six months ago to $2,932 this fall. For timber it went from $2,531 to $2,566.
The numbers varied around the state. The South Central crop reporting district reported a 1.3% increase while the North Central district reported a 1.7% decrease.
The numbers by district were:
- Central, down 0.6%;
- East Central, up 1%;
- North Central, down 1.7%;
- Northeast, down 1.1%;
- Northwest, up 0.2%;
- South Central, up 1.3%;
- Southeast, down 0.6%;
- Southwest up 0.9%;
- West Central, up 1.2%.
Positive factors cited by Realtors in regards to land prices include low interest rates, 1031 exchange activity and investor interest. Negative factors include trade uncertainty, variability in crop yields and weather conditions in 2020.