Iowa State University Extension

2001 IOWA LAND VALUE SURVEY: OVERVIEW

Prepared by Michael D. Duffy, agricultural extension economist, and Darnell Smith, research associate, Iowa State University, December 19, 2001.

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 and Darnell Smith.

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 2001 survey is based on 599 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 2001 state average for all grades of land was estimated to be $1,926 per acre.

2.2 The increase in the state value was $69 per acre from 2000.

2.3 The percentage increase was 3.7 percent from 2000.


3.0 Analysis by Crop Reporting District.

3.1 The highest land values were reported for East Central Iowa, $2,324 per acre.

3.2 The lowest land values were estimated for South Central Iowa, $1,039 per acre.

3.3 The greatest percentage increase was in Southwest Iowa, 7.0 percent.

3.4 The least percentage increase was in Northwest Iowa, 1.9 percent.

4.0 Analysis by Counties.

4.1 The highest value was estimated for Scott county, $3,233 per acre.

4.2 The lowest value was in Decatur county, $798 per acre.

4.3 The greatest dollar increase was $214 in Scott county.

4.4 The least dollar increase was $24 in Dickinson and Lyon counties.

4.5 The greatest percentage increase was 7.1 percent reported in Fremont, Jones, Mills, Montgomery, Page, and Scott counties.

4.6 The least percentage increase was in 1.2 percent in Dickinson, Lyon, O'Brien, and Osceola counties.

5.0 Analysis by Quality of Land.

5.1 Low grade land in the state averaged $1,170 per acre and showed a 4.7 percent increase or $53 per acre.

5.2 Medium grade land averaged $1,768 per acre and showed a 3.9 percent increase or $67 per acre.

5.3 High grade land averaged $2,407 per acre and showed an increase of 3.6 percent or $83 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 six positive factors listed by more than 10 percent of the respondents.

6.2 Lower interest rates were the most frequently listed positive factor identified by 48 percent of the respondents.

6.3 Other positive factors were: government programs or payments (40 percent), investment demand (24 percent), crop yields (14 percent), land supply (14 percent), and farm expansion/consolidation (13 percent).

6.4 There were 3 negative factors listed by over 10 percent of the respondents. Poor markets or prices or some variation of that theme were listed by 59 percent of the respondents. The other factors were: poor economy/world conditions/Sept. 11 (22 percent) and uncertainty over government programs(20 percent).

7.0 Number of Sales Compared to Previous Year.

When asked to compare the number of sales in 2001 relative to 2000, 18 percent reported more, 51 percent the same, and 31 percent reported less.

8.0 Land Sales by Buyer Category.

The 2001 survey asked respondents what percent of the land sales were sold to four categories of buyers.

8.1 The majority of farmland sales: 67 percent were to existing farmers. Investors represented 27 percent of the sales. New farmers represented 3 percent of the sales and, other purchases were 3 percent of sales.

8.2 Sales to existing farmers by Crop Reporting Districts ranged from 74 percent in West Central to 53 percent in South Central.

8.3 Sales to investors were highest in South Central (41 percent). West Central reported the lowest investor activity (22 percent).

9.0 Interpretation of Survey Results.

The average 3.7 percent increase in land values is in line with one of the 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, 2001.

9.1 The survey showed the second year of increases in average land values following the two years of decline. The survey showed an increase in values in all counties and Crop Reporting Districts except for the low quality land in the Southeast .

9.2 The survey respondents show in 2001 the level of investor interest in Iowa farmland remained strong but slightly lower than in 2000. The number of respondents reporting more sales in 2001 was also down slightly.

9.3 The positive and negative factors clearly summarize the current situation with respect to the Iowa farmland market. The lower interest rates and government programs exerted a strong influence on land values in 2001. On the flip side, poor commodity prices, the general economic outlook and the uncertainty over government programs provided significant negative effects on the land market. The tragedy of September 11 was a significant negative factor in the opinion of some of the respondents, but there were others who did not feel this was too negative and may even have exerted some positive effects as people looked for more secure investments.

Table 1. Recent Changes in Iowa Farmland Values

  Value Per Acre Dollar Change Percentage 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

1,095

261

31.3

1976

1,368

273

24.9

1977

1,450

82

6.0

1978

1,646

196

13.5

1979

1,958

312

19.0

1980

2,066

108

5.5

1981

2,147

82

3.9

1982

1,801

-346

-16.1

1983

1,691

-110

- 6.1

1984

1,357

-334

-19.8

1985

948

-409

-30.2

1986

787

-161

-17.0

1987

875

88

11.2

1988

1,054

179

20.4

1989

1,139

85

8.1

1990

1,214

75

6.6

1991

1,219

5

.4

1992

1,249

30

2.5

1993

1,275

26

2.1

1994

1,356

81

6.4

1995

1,455

99

7.3

1996

1,682

227

15.6

1997

1,837

155

9.2

1998

1,801

-36

-1.9

1999

1,781

-20

-1.1

2000

1,857

76

4.3

2001

1,926

69

3.7

 

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

Year 

State Average

Northwest 

North Central 

Northeast 

West Central

 

Central

East Central

Southwest 

South Central 

Southeast

 
All Grades

1981

2147

2562

2721

2227

2056

2538

2530

1586

1184

1790

1986

787

937

912

786

768

930

1000

607

403

705

1987

875

1084

1055

835

871

1044

1053

676

421

782

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

2000

1857

2198

2169

1868

1924

2195

2190

1412

992

1655

2001

1926

2240

2240

1950

1969

2246

2324

1511

1039

1705

 

High Grade

1981

2759

3035

3209

2885

2576

3061

3293

2050

1880

2726

1986

1048

1131

1094

1048

1000

1154

1343

832

682

1120

1987

1150

1306

1260

1102

1125

1288

1399

912

688

1229

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

2000

2324

2547

2462

2329

2375

2660

2743

1825

1509

2353

2001

2407

2588

2546

2439

2437

2685

2907

1947

1582

2447

 

Medium Grade

1981

1931

2252

2334

2052

1866

2279

2258

1472

1149

1604

1986

699

830

777

709

684

813

866

561

396

622

1987

780

957

903

754

776

928

925

630

413

696

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

2000

1701

2001

1972

1728

1772

1956

1996

1320

955

1511

2001

1768

2057

2040

1800

1807

2013

2125

1410

1004

1571

 

Low Grade

1981

1157

1460

1517

1220

1125

1336

1366

959

624

752

1986

377

488

468

405

350

475

460

290

176

257

1987

432

571

553

444

419

535

495

341

207

289

1993

656

856

834

626

669

781

742

531

342

478

1994

714

882

935

668

752

914

808

555

348

503

1995

792

992

1049

737

812

967

925

614

400

574

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

2000

1117

1370

1387

1167

1126

1299

1288

862

597

875

2001

1170

1388

1423

1208

1202

1416

1404

918

623

871

 

Level of Sales Activity, 2001

Crop Reporting District

More

Same

Less 

Percent

Northwest

18

65

17

North Central

15

39

46

Northeast

18

49

33

West Central

15

55

30

Central

22

49

29

East Central

25

37

38

Southwest

16

60

24

South Central

14

53

33

Southeast

23

43

34

State

18

51

31

 

Iowa Land Purchases, 2001

 

Existing Farmers

Investors

New Farmers

Other

Percent

Northwest

72

23

3

2

North Central

72

25

1

2

Northeast

66

26

4

4

West Central

74

22

3

1

Central

67

26

2

5

East Central

67

27

2

4

Southwest

63

32

2

3

South Central

53

41

3

3

Southeast

64

24

4

8

  State

67

27

3

3

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