Land prices in Iowa, Wisconsin, and Minnesota were higher with more buyer interest than the previous month. Land sold for many reasons including estates, dissolving business partnerships, clients moving and clients doing 1031 exchanges into other land. The main driver for buyers was interest rates and loan terms as well as scarcity in the market, proximity to current owned land or an operation, rural building opportunities or hunting land purchases in desirable neighborhoods.
There were many negatives that could have affected the market prices of land however did not. There was a ground hurricane in central Iowa that substantially affected the expected overall crop quality and storage capacity statewide. Interesting point was this only changed the prices of commodities 10-15% in the corn and soybean markets. This translates to the crop being strong across the county and supply remaining high.
Land Prices in the month of August, 2020 per acre:
Wisconsin Tillable $4200 – $8000
Wisconsin Timber $3500 – $5000+
Iowa Tillable $6500 – $11,100
Iowa Timber $4000 – $7600
Minnesota Tillable $5000 – $7800
Minnesota Timber $3000 – $4250
Land prices moving forward are expected to remain stable through the end of the year due to interest rates, demand, and hedges against inflation. We have some potential negatives to watch out for moving onward. The election has caused concern due to the proposed tax changes effecting 1031 exchange and the removal of the step up in basis benefiting heirs to estates. This in my opinion would slow the market and be a negative to land prices in the future if there was an administration change.
If you or someone you know is interested in purchasing land, selling a property in the future, or needs a land appraisal contact one of our qualified agents or appraisers today. They are an excellent resource for finding property as well as answering any questions you may have.