Real Estate Trends as of July 1, 2012
Jul 09, 2012
Farm Credit Services of America monitors real estate value trends through semiannual appraisals of 65 agricultural farms located throughout our Association. The Appraisal Team updates benchmark farm values based on recent real estate sales on January 1st and July 1st each year.
The average change in benchmark farm values is shown below. The number of benchmark farms is shown in parenthesis after each state.
The following data is as of July 1, 2012:
State Six Month One Year Five Year Ten Year
Iowa (21): 6.2% 21.7% 104.0% 271.0%
Nebraska (19): 16.3% 47.3% 147.6% 276.1%
South Dakota (23): 12.9% 24.1% 88.2% 293.4%
Wyoming (2): 1.1% 1.1% 7.2% 95.7%
The real estate market has been active in South Dakota, Nebraska, and Iowa through the first six months of 2012. There is strong demand for cropland and pasture across the Association.
The six-month benchmark farm trends indicate:
- Twenty of the twenty-one benchmark farm values in the state of Iowa increased over the past six months with one benchmark farm value being considered stable. The benchmarks had individual value changes from stable to +16.1% with an average increase of 6.2%. Five of the twenty-one benchmark farms had values ranging from $10,975 to $12,900 per acre.
- The nineteen benchmark farms values in the state of Nebraska increased from 3.6% to 73.7% with a six month average increase of 16.3%. Eliminating the benchmark farm with the 73.7% increase narrows the range to +3.6% to +25.0% with an average increase of 13.1%. This range is more representative of the market.
- Twenty-one of the twenty-three benchmark farm values in the state of South Dakota increased over the past six months with two benchmark farm values being considered stable. The benchmarks had individual value changes from stable to +27.5% with an average increase of 12.9%.
- Wyoming’s ranch benchmark value increased 2.3% with the irrigated cropland benchmark value being considered stable.
Profitable cash grain and livestock production, strong demand for cropland and pasture tracts, relatively low interest rates, and a lack of alternative investments from both the buyer’s and seller’s perspectives continue to provide strength to the real estate market.