This article from NYTimes.com
Many Drive Up Value of Iowa Farmland
September 23, 2003
By THE ASSOCIATED PRESS
Filed at 2:06 a.m. ET
WEST DES MOINES, Iowa (AP) -- Iowa farmland is growing in
demand and value as people buy land as a secure investment,
hunters seek timberland and former Iowans return home to
retire.
``The reasons given for the increases include a low supply
of listings and a strong demand,'' Troy Louwagie, chairman
of an Iowa Farm and Land Chapter No. 2 Realtors Land
Institute survey, said Monday.
He said strong interest by investors seeking alternatives
to a volatile stock market, as well as low interest rates
have driven some of the demand.
The average value of Iowa farmland rose 3.5 percent from
March to September. Farmland values increased 4.9 percent
from September 2002 to March, contributing to an increase
of 8.4 percent for the year, according to this year's
survey of real estate agents.
All nine districts of the state reported an increase,
ranging from 2.5 percent in east central Iowa, to 5.1
percent in the south central.
The land institute has been doing the survey since 1978. It
questions its members, who are specialists in farmland,
every six months on land classified by potential corn
production as well as pasture and timberland.
Louwagie said timber sales across the state are up 20
percent from last year, and there are 80 percent more
buyers than sellers.
A reduction in capital gains taxes from 20 percent to 15
percent by the Bush Administration could result in more
landowners placing property on the market within the next
few years, Louwagie said.
Investors can see a rate of return of 3 percent to 4
percent on farmland, Louwagie said. They often prefer
buying farmland rather than commercial property because
tenant vacancies cut into a return on the investment.
``The solid aspect of good farmland is that you always can
find someone to farm it,'' said Dick Wardell, a real estate
agent.
Iowans who have opened businesses in other states and want
to return to Iowa to retire are buying farmland, said agent
Cliff Hoover.
``I'm seeing people who had roots in Iowa and left to make
their money somewhere else, in Arizona or California, and
now they're showing an interest in investing in farmland,
investing in their roots,'' he said. ``They're coming
home.''
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