Tanner Knowlton – Iowa Associate General Appraiser and Iowa Land Agent gives his expert opinion:
We first want to start by expressing our gratitude for the exceptional year of business we have had in 2023. It has been a remarkable year filled with achievements and growth, and we extend our heartfelt appreciation to all our valued clients and partners. As we start the new year, it becomes apparent that the real estate market is showing signs of reverting to a more typical state. However, it is important to note that the term “normal” is relative, particularly when considering the extraordinary years of ’21 and ’22, which witnessed an unprecedented increase in acre volume and record-breaking prices per acre.
Looking at the market performance in 2023, there was a noticeable decrease in the volume of land transactions, as well as a decline in the number of acres sold at auction. Despite these changes, the values of land managed to maintain stability or even exhibit a slight upward trend over the course of the year. Recreational ground and top-notch farmland of the highest grade, known as “A” quality, experienced the most substantial surge in land values. Conversely, there was a noticeable decline in the value of farmland rated as “C” quality and below, which persisted throughout the year 2023.
Despite facing intense drought conditions in all service areas, operators were able to conclude the year on a positive note. The intensity of the drought posed challenges, but the better-than-anticipated harvests provided unexpectedly higher yields. However, there is a ray of hope as interest rates are projected to decrease during that time. On the other hand, landowners can find reassurance in the strength of their high land equity, which continues to be a favorable aspect for them.
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