Although spotty, there are signs of stabilization underway in portions of the Corn Belt farmland market. The state’s cropland rose values 2% in the six-month period ending in September and increased nearly 3% compared to a year earlier, according to a survey conducted by the Iowa Chapter of the Realtors Land Institute. That is the first increase in three years.
Other states, meanwhile, show steady to slightly lower declines. So why the gain in farmland values in Iowa?
First, note that the run-up in farmland values began in Iowa and then spread to other states a year later. Second, the downturn in farmland values also began in Iowa and then spread a year later to other states. So stabilization in Iowa farmland values while values are steady at best and mostly weaker in other states should not be surprising.
Third, the volume of farm properties offered for sale remains tight. That has tended to support prices for quality farms brought to the market. The number of properties moving to the market will likely rise seasonally this winter. But it does not appear a burdensome wave of supply is headed to the market in 2018. If sales volume remains subdued, the market in other states might also see signs of stabilization