Wednesday, February 16, 2011

Farmland Boom Provides Bright Spot for U.S. Midwest Real Estate

OK, there is no longer farmland in the OC, but I though this was interesting.  Commodity prices and food prices are increasing, so the value of farmland is increasing to supply these commodities.
The winner of last month’s auction at St. Joseph’s Parish Center in Jefferson offered $8,200 an acre -- almost $1 million -- for the plot in Scranton Township. That’s 44 percent higher than the $5,701 per-acre estimate for average values in the county as of Nov. 1, according to Iowa State University data.
“It’s reflective of what we’re seeing,” Mike Duffy, an Iowa State economist in Ames, said of the auction outcome. “There’s just not a lot of ground offered for sale.”
Farmers and investors across the Midwest are bidding up cropland at auctions like the one in Jefferson as commodity prices surge. Farmland values in the central U.S. increased the most in at least two years in the fourth quarter, the Federal Reserve Bank of Kansas City said yesterday. The gains are a bright spot in a region where manufacturing job losses have driven down prices of homes and commercial property.

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