Iowa State University Extension

1999 IOWA LAND VALUE SURVEY: OVERVIEW

Prepared by Michael D. Duffy, agricultural extension economist, Jay Lillywhite, research associate, and Matt Ernst, research assistant, Iowa State University, December 1999.

1.0 History and Purpose of the Land Value Survey.

1.1 The survey was initiated in 1941 and is sponsored annually by the Iowa Agriculture and Home Economics Experiment Station, Iowa State University. Only the state average and the district averages are based directly on the ISU survey data. The county estimates are derived by using a procedure that combines the ISU survey results with data from the U.S. Census of Agriculture. The survey was conducted by Michael Duffy with assistance from Jay Lillywhite and Matt Ernst.

1.2 The survey is intended to provide information on general land value trends, geographical land price relationships and factors influencing the Iowa land market.

1.3 The survey is based on reports by licensed real estate brokers and selected individuals considered to be knowledgeable of land market conditions. Approximately 1100 surveys are mailed each year. Normally 500-600 completed surveys are returned. The 1999 survey is based on 631 usable responses.

1.4 Participants in the survey are asked to estimate the value of high, medium and low grade land in their county. Comparative sales and other factors are taken into account by the respondents in making these value estimates.

2.0 Analysis by State.

2.1 The 1999 state average for all grades of land was estimated to be $1781 per acre.

2.2 The decrease in the state value was $20 per acre from 1998.

2.3 The percentage decrease was 1.1 percent from 1998.

3.0 Analysis by Crop Reporting District.

3.1 The highest land values were reported for Central Iowa, $2128 per acre.

3.2 The lowest land values were estimated for South Central Iowa, $981 per acre.

3.3 The greatest percentage increase was in South Central Iowa, 3.5 percent.

3.4 The greatest percentage decrease was in Northwest Iowa, 5.3 percent.

4.0 Analysis by Counties.

4.1 The highest value was estimated for Scott county, $2970 per acre.

4.2 The lowest value was in Decatur county, $752 per acre.

4.3 The greatest dollar increase was $137 in Clayton county.

4.4 The greatest dollar decrease was $135 in Hardin county.

4.5 The greatest percentage increase was in Clayton county, 9.2 percent.

4.6 The greatest percentage decrease was in Hardin county, 5.9 percent.

5.0 Analysis by Quality of Land.

5.1 Low grade land in the state averaged $1045 per acre and showed a 1.4 percent increase or $15 per acre.

5.2 Medium grade land averaged $1629 per acre and showed a .5 percent decrease or $9 per acre.

5.3 High grade land averaged $2249 per acre and showed a decrease of 1.6 percent or $35 per acre.

6.0 Major Factors Influencing the Real Estate Market.

Survey respondents listed both positive and negative factors influencing the land market. The respondents listed multiple factors in most cases.

6.1 There were 5 positive factors listed by over 10 percent of the respondents.

6.2 Government payments were the most frequently listed positive factor identified by 26 percent of the respondents.

6.3 Other positive factors were: interest rates (23 percent), crop yields (21 percent), land supply (17 percent), and investment demand (17 percent).

6.4 There were 4 negative factors listed by over 10 percent of the respondents and they are all variations of low prices: low grain prices (42 percent), low commodity prices (39 percent), low livestock prices (20 percent), and overall poor ag economy and outlook (12 percent).

7.0 Number of Sales Compared to Previous Year.

When asked to compare the number of sales in 1999 relative to 1998, 13 percent reported more, 43 percent the same, and 44 percent reported less.

8.0 Land Sales by Buyer Category.

The 1999 survey asked respondents what percent of the land sales were sold to four categories of buyers.

8.1 The majority of farmland sales: 64 percent were to existing farmers. Investors represented 30 percent of the sales. New farmers represented 2 percent of the sales and, other purchases were 4 percent of sales.

8.2 Sales to existing farmers by Crop Reporting Districts ranged from 81 percent in North Central to 29 percent in South Central.

8.3 Sales to investors were highest in South Central (60 percent). North Central reported the lowest investor activity (15 percent).

9.0 Interpretation of Survey Results.

The average 1.1 percent drop in land values is in line with other surveys of Iowa land values. It is important to remember the different time periods covered when comparing surveys. The Iowa State University survey reported here is an annual survey as of November 1, 1999.

9.1 This survey showed the continuation of the conditions in Iowa land values first noted last year, namely, there are some counties and Crop Reporting Districts with increased values while others show decreasing values. The 1999 survey showed a drop in average land values for the second straight year. The 1999 drop of 1.1 percent is slightly less than the average drop of 1.9 percent reported last year.

9.2 The 1999 survey shows an interesting pattern of changes in land values. Values were lower in the Northwest, North Central, Central and East Central parts of the state. These areas are generally considered to have the best soils in the state. Counties in the South Central and Northeast showed an increase in value. Also, Iowa has 19 counties that border on a major river. Slightly over two-thirds of these counties showed an increase in value.

9.3 Strong farm income, comprised mainly of government payments held land values in Iowa in 1999. In addition, investor interest played a supporting role in many areas of the state. The 1999 survey showed a decreasing amount of sales activity around

Table 1. Recent Changes in Iowa Farmland Values

Year

Value per acre

Dollar change

Percent change

1966

354

36

11.4

1967

397

42

12.0

1968

409

12

3.0

1969

419

10

2.5

1970

419

0

0.0

1971

430

11

2.6

1972

482

52

12.0

1973

635

154

31.9

1974

834

199

31.3

1975

1095

261

31.3

1976

1368

273

24.9

1977

1450

82

6.0

1978

1646

196

13.5

1979

1958

312

19.0

1980

2066

108

5.5

1981

2147

82

3.9

1982

1801

-346

-16.1

1983

1691

-110

- 6.1

1984

1357

-334

-19.8

1985

948

-409

-30.2

1986

787

-161

-17.0

1987

875

88

11.2

1988

1054

179

20.4

1989

1139

85

8.1

1990

1214

75

6.6

1991

1219

5

.4

1992

1249

30

2.5

1993

1275

26

2.1

1994

1356

81

6.4

1995

1455

99

7.3

1996

1682

227

15.6

1997

1837

155

9.2

1998

1801

-36

-1.9

1999

1781

-20

-1.1

Table 2. Average Value Per Acre of Iowa Farmland Listed by Crop Reporting Districts and Grades of Land

State
Average

Northwest

North
Central

Northeast

West
Central

Central

East
Central

Southwest

South
Central

Southeast

Year

All Grades

1980

2066

2560

2624

2066

2038

2490

2323

1599

1079

1670

1986

787

937

912

786

768

930

1000

607

403

705

1987

875

1084

1055

835

871

1044

1053

676

421

782

1990

1214

1590

1447

1183

1263

1479

1339

870

588

1058

1991

1219

1576

1437

1144

1279

1476

1373

891

596

1093

1992

1249

1603

1449

1162

1324

1508

1395

905

646

1138

1993

1275

1618

1507

1176

1326

1542

1433

961

643

1166

1994

1356

1663

1610

1249

1453

1653

1546

1009

673

1241

1995

1455

1755

1724

1330

1528

1766

1676

1102

742

1367

1996

1682

2071

1997

1559

1758

2090

1965

1206

851

1502

1997

1837

2263

2194

1721

1894

2295

2110

1369

957

1580

1998

1801

2174

2119

1757

1820

2192

2123

1373

948

1585

1999

1781

2059

2073

1807

1837

2128

2118

1346

981

1570

High Grade

1980

2646

3037

3053

2682

2545

3044

2986

2095

1721

2522

1986

1048

1131

1094

1048

1000

1154

1343

832

682

1120

1987

1150

1306

1260

1102

1125

1288

1399

912

688

1229

1990

1581

1907

1705

1595

1619

1816

1744

1175

935

1622

1991

1589

1898

1676

1522

1647

1812

1784

1198

949

1709

1992

1628

1920

1696

1557

1702

1846

1800

1212

1039

1764

1993

1666

1941

1764

1558

1707

1914

1851

1284

1041

1834

1994

1760

1972

1871

1651

1859

2010

1995

1347

1092

1938

1995

1869

2058

1968

1729

1939

2159

2131

1483

1163

2091

1996

2151

2431

2300

2015

2210

2558

2518

1586

1316

2291

1997

2328

2647

2531

2210

2350

2790

2673

1786

1443

2383

1998

2284

2534

2449

2238

2268

2659

2683

1798

1455

2369

1999

2249

2401

2362

2275

2288

2589

2685

1773

1499

2271

Medium Grade

1980

1846

2227

2287

1876

1839

2194

2074

1482

1039

1489

1986

699

830

777

709

684

813

866

561

396

622

1987

780

957

903

754

776

928

925

630

413

696

1990

1085

1405

1257

1053

1120

1318

1199

797

578

946

1991

1089

1379

1266

1035

1136

1313

1229

820

581

952

1992

1113

1420

1275

1038

1175

1346

1238

835

622

975

1993

1135

1434

1317

1054

1174

1363

1268

888

618

1015

1994

1223

1511

1420

1127

1316

1478

1387

936

652

1085

1995

1322

1598

1558

1216

1394

1580

1510

1009

726

1210

1996

1514

1873

1769

1423

1585

1843

1752

1111

829

1321

1997

1668

2033

1945

1577

1742

2050

1910

1280

945

1404

1998

1638

1970

1885

1604

1670

1968

1930

1274

924

1414

1999

1629

1876

1869

1665

1692

1898

1945

1241

949

1433

Low Grade

1980

1126

1475

1490

1138

1123

1303

1273

965

579

725

1986

377

488

468

405

350

475

460

290

176

257

1987

432

571

553

444

419

535

495

341

207

289

1990

608

835

787

589

619

750

635

456

301

445

1991

623

828

801

588

632

763

691

479

321

449

1992

648

866

813

592

668

784

712

511

346

486

1993

656

856

834

626

669

781

742

531

342

478

1994

714

882

935

668

752

914

808

555

348

503

1996

936

1213

1207

878

981

1146

1073

688

479

674

1997

1042

1354

1337

992

1083

1279

1186

787

544

730

1998

1030

1299

1286

1059

1021

1258

1205

792

542

739

1999

1045

1216

1314

1110

1040

1296

1188

798

582

790

Level of Sales Activity, 1999

Crop Reporting District

More

Same

Less

Percentage

Northwest

12

49

39

North Central

6

33

61

Northeast

11

43

46

West Central

16

57

27

Central

15

35

50

East Central

18

38

44

Southwest

8

38

54

South Central

16

54

30

Southeast

16

44

40

State

13

43

44

Iowa Land Purchases, 1999

Crop Reporting District

Existing Farmers

Investors

New Farmers

Other

Percentage

Northwest

71

27

1

1

North Central

81

14

3

2

Northeast

65

29

3

3

West Central

57

39

1

3

Central

69

27

1

3

East Central

68

29

1

2

Southwest

64

31

2

3

South Central

29

60

4

7

Southeast

72

17

3

8

State

64

30

2

4

Return to 1999 Land Value Home Page