2002 IOWA LAND VALUE SURVEY: OVERVIEW
Prepared by Michael D. Duffy, agricultural extension economist, and Darnell Smith, research associate, Iowa State University, December 18, 2002.
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 2002 survey is based on 591 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 2002 state average for all grades of land was estimated to be $2083 per acre.
2.2 The increase in the state value was $157 per acre from 2001.
2.3 The percentage increase was 8.2 percent from 2001.
3.0 Analysis by Crop Reporting District.
3.1 The highest land values were reported for East Central Iowa, $2547 per acre.
3.2 The lowest land values were estimated for South Central Iowa, $1211 per acre.
3.3 The greatest percentage increase was in South Central Iowa, 16.6 percent.
3.4 The least percentage increase was in North Central Iowa, 5.7 percent.
4.0 Analysis by Counties.
4.1 The highest value was estimated for Scott County, $3379 per acre.
4.2 The lowest value was in Decatur county, $823 per acre.
4.3 The greatest dollar increase was $581 in Jones county.
4.4 The greatest dollar decrease was $-165 in Audubon county.
4.5 The greatest percentage increase was 29.5 percent reported in Des Moines County.
4.6 The greatest percentage decrease was $-8.7 percent in Ringgold County.
5.0 Analysis by Quality of Land.
5.1 Low grade land in the state averaged $1,322 per acre and showed a 13.0 percent increase or $152 per acre.
5.2 Medium grade land averaged $1,924 per acre and showed a 8.8 percent increase or $156 per acre.
5.3 High grade land averaged $2,576 per acre and showed an increase of 7.0 percent or $169 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 seven 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 52 percent of the respondents.
6.3 Other positive factors were: government payments (33 percent), crop yields (28 percent), improving commodity prices (24 percent), stock market declines (17
percent), scarcity of listings (15 percent), and strong investment demand (14 percent).
6.4 There were 4 negative factors listed by over 10 percent of the respondents. Poor commodity prices in general (14 percent), farm economy variability (13 percent), general economic outlook/world conditions (13 percent), and uncertainty and problems with the government programs (11 percent).
7.0 Number of Sales Compared to Previous Year.
When asked to compare the number of sales in 2002 relative to 2001, 28 percent
reported more, 49 percent the same, and 23 percent reported less.
8.0 Land Sales by Buyer Category.
The 2002 survey asked respondents what percent of the land sales were sold
to four categories of buyers.
8.1 The majority of farmland sales: 58 percent were to existing farmers. Investors represented 37 percent of the sales. New farmers represented 2 percent of the sales and, other purchases were 3 percent of sales.
8.2 Sales to existing farmers by Crop Reporting Districts ranged from 72 percent in Northwest to 40 percent in South Central.
8.3 Sales to investors were highest in South Central (48 percent). Southeast reported the lowest investor activity (25 percent).
9.0 Interpretation of Survey Results.
The results of this years survey are some of the most unusual since the
survey was started. The variability in the survey results has not been seen
in previous years surveys. In addition, there are no discernable patterns
for increases or decreases as found in previous years. In this survey some counties
are up considerably while a neighboring county may not be up at all.
The survey showed the third year of increases in average land values following
the two years of decline. The survey showed an increase in all the crop reporting
districts but 19 of Iowas counties actually reported lower land values
in 2002 compared to 2001. The average 2002 value is the second highest ever
recorded in Iowa history. Adjusting the values for inflation, however, shows
that the values are similar to what they were prior to the rapid increases in
the 1970s.
The 2002 survey also shows the highest investor interest in purchasing farmland.
There are many reasons for this including the low interest rates and the poor
performance in
the stock market. This might be part of the reason for the wide variability
in reported values.
It is also interesting to note that there was no dominant negative factor as
in years past. The respondents talked about factors that were more local in
nature. The average 8.2 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, 2002.
We examined the data to try and determine the cause for the extreme variability.
The number of respondents is similar to what we have had in the past. Similarly
there is no
difference in the percentage of new respondents in a county or region. Overall
84 percent of the respondents answered the questionnaire last year.
The data do not reveal a particular reason for the unanticipated results. Investor
demand varies considerably and this demand lends itself to more variability
than traditional farmer demand. There are certain physical factors such as rights-of-way
that can create unique demand situations that can vary from county to county.
It is also possible that a particular county may have more aggressive bidders
influencing the local land values. Finally, a plausible explanation is that
as we approach peaks in land values greater variability can reflect alternative
attitudes about future directions.
Table 1. Recent Changes in Iowa Farmland Values
Value Per Acre | Dollar Change | Percentage Change | |
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 |
2002 |
2,083 |
157 |
8.2 |
Year |
State |
Northwest
|
North |
Northeast
|
West |
Central |
East |
Southwest
|
South |
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 |
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 |
2002 |
2083 |
2434 |
2367 |
2149 |
2101 |
2392 |
2547 |
1632 |
1211 |
1808 |
|
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 |
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 |
2002 |
2576 |
2776 |
2676 |
2625 |
2583 |
2848 |
3105 |
2117 |
1931 |
2539 |
|
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 |
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 |
2002 |
1924 |
2278 |
2142 |
2010 |
1930 |
2175 |
2358 |
1522 |
1152 |
1659 |
|
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 |
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 |
2002 |
1322 |
1571 |
1568 |
1448 |
1332 |
1516 |
1628 |
996 |
760 |
997 |
Crop
Reporting District |
|
|
Less |
Percent |
|||
Northwest |
32 |
53 |
15 |
North
Central |
36 |
41 |
23 |
Northeast |
25 |
57 |
18 |
West
Central |
26 |
42 |
32 |
Central |
26 |
51 |
23 |
East
Central |
31 |
43 |
27 |
Southwest |
14 |
58 |
28 |
South
Central |
19 |
57 |
24 |
Southeast |
36 |
42 |
22 |
State |
28 |
49 |
23 |
|
Existing Farmers |
Investors |
New Farmers |
Other |
Percent |
||||
Northwest |
72 |
27 |
1 |
1 |
North Central |
69 |
28 |
2 |
1 |
Northeast |
63 |
37 |
1 |
1 |
West Central |
62 |
38 |
1 |
2 |
Central |
51 |
45 |
3 |
1 |
East Central |
59 |
34 |
4 |
5 |
Southwest |
63 |
35 |
2 |
1 |
South Central |
40 |
48 |
2 |
10 |
Southeast |
68 |
25 |
2 |
6 |
State |
58 |
37 |
2 |
3 |