Despite a decrease in the value of cropland across the state of Iowa, there continues to be high demand for certain types of land.
The Land Trends and Value Survey, presented by the Iowa Farm and Land Chapter #2 REALTORS Land Institute, reported a statewide average decrease of cropland values of 4.2% for the year from March 1, 2013 to March 1, 2014. This follows an increase of 17.1% for the year from March 2012 to March 2013; and an average increase of 23.7% for the year from March 2011 to March 2012. This is the first reported statewide decrease since March 2008 through March 2009.
“Although lower commodity prices have put some downward pressure on low and medium quality farms, we are still seeing strong demand for high quality farms and have seen renewed interest in non-tillable land, said Eric Schlutz, Accredited Land Consultant with Ruhl Farm&Land and Muscatine Manager for Ruhl&Ruhl REALTORS.
“Strong beef prices have increased demand for pasture land along with the strong investor demand for recreational parcels."
The survey attributed the current decrease in land values to higher input costs, increasing interest rates, government regulation uncertainty, and uncertainty of the U.S. and world economy.
For the survey, participants are asked to estimate the average value of farmland as of March 1, 2014. 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. All nine Iowa crop reporting districts showed decreases in the last 6 months.
The survey results shouldn’t scare the public or make a huge impact on our markets just yet, said Ken Paper, Accredited Land Consultant with Ruhl Farm&Land and Realtor with Ruhl&Ruhl Realtors.
“I see no movement in high quality tillable land,” Paper said. “Many farmers are in a good cash position coming out of a strong commodity market. There will probably be some stress on the low quality parcels, but all in all I think it is too soon to make any judgments on the land market.
Ruhl Farm&Land, a division of Ruhl&Ruhl REALTORS, is focused on the sale, purchase and marketing of land, farms and acreages.
A family-owned company since 1862, Ruhl&Ruhl Realtors has grown to 290 sales associates, 62 employees and twelve offices, selling more than 5,000 homes in eastern Iowa, western Illinois and southwest Wisconsin. The company has residential sales offices in Bettendorf, Burlington, Cedar Rapids, Clinton, Davenport, DeWitt, Dubuque, Iowa City, Maquoketa, Muscatine, and Washington, Iowa; and in Moline, Illinois. In addition to residential sales, the company offers services in relocation, property management, real estate investments, new home sales, land development, farm and land sales, senior services, home vendor services, insurance services through the Nelson Brothers Agency and mortgage services through Ruhl Mortgage. For more information on Ruhl&Ruhl Realtors, visit their website at www.RuhlHomes.com.