In Iowa, the real estate market is booming – at least when it comes to farmland. As a result, the state’s employment numbers are looking pretty good and farmers are selling the family farm for millions of dollars in some cases. Presently, the appreciation is continuing unchecked as the cost-per-acre of farmland in the state has risen more than 30 percent over the course of 2011 and is projected to continue rising in 2012. The boom is spreading to other Midwestern states as well, with Illinois and Indiana prices rocketing 25 percent over 2011[1].

The farmland boom is a result of the rising price of corn, in large part. Corn prices have tripled since 2007 and many investors are shifting their money into farmland in hopes of taking advantage of continuing growth in agriculture. However, although Iowa’s employment numbers are much better than those throughout the rest of the country, some analysts argue that the skyrocketing land values do not necessarily equate to more jobs. In fact, these doom-sayers point out that in the late 1970s the state experienced similar farmland growth that was followed by a “huge crisis in the 80’s” due, they say, to the farmland bubble[2]. Economists point out that the more farmland is out there, the less land is available for housing communities, stores and manufacturing, all of which create more jobs than farming. Do you think that these detractors are right? Is Iowa’s farmland boom really just a precursor to a bust? Would you buy land in Iowa right now?

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[1] http://rockcenter.msnbc.msn.com/_news/2012/01/02/9891968-on-eve-of-caucus-a-different-boom-in-iowa-real-estate-prices-soar-for-farmland

[2] http://www.cbsnews.com/8301-500173_162-57350885/iowa-farmland-prices-leap-but-not-job-market/