Sanborn, Iowa — A survey of land price trends shows that there has been a drop in Iowa land values. But a local auctioneer and appraiser is not concerned.
The Iowa Chapter of REALTORS Land Institute says that its September 2015 Land Trends and Values Survey shows a statewide average decrease of cropland values of 3.7 percent from March 2015 to September 2015. This, combined with the 7.6 percent decrease reported in March 2015, indicates a statewide average decrease of 11.3 percent from September 1, 2014 to September 1, 2015. All nine Iowa crop reporting districts showed a decrease in the average farmland value. The districts varied from a 1.9 percent decrease in the west central district to a 5.4 percent decrease in the south central district since March 2015. These estimates are for bare, unimproved land with a sale price on a cash basis.
But Todd Hatterman, appraiser and auctioneer with VanderWerff and Associates in Sanborn says he’s undeterred by the news.
The survey says that factors contributing to current farmland values include lower commodity prices, increasing interest rates, lack of stable alternative investments, cash on hand, and a limited amount of land on the market.
Kyle J. Hansen, real estate broker for Hertz Farm Management and chairman of the survey committee, said this decrease was anticipated. He says that land values are closely tied to the net revenue generated by what is able to be produced. Commodity prices are still the highest factor in establishing land values, he said.
Hatterman says he doesn’t believe that news of lower prices or price trends has much influence on the market.
Hatterman says demand remains strong.
The full survey summary is available at rlifarmandranch.com. Participants in the survey are specialists in farmland, and were 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 September 1, 2015.
This survey has been conducted in March and September since 1978 by the Iowa REALTORS Land Institute Chapter, which is an affiliate of the National Association of REALTORS and is organized for REALTORS who specialize in farm and land sales, management, development and appraisal.