Farmland market expected to stay strong into 2023
The farmland market is expected to remain strong going into 2023.
Compeer Financial senior real estate appraiser Bill Mergen says he anticipates high bids at farm auctions this fall and winter despite rising interest rates.
“I just talked to a banker and the 30-year fixed rate is about 7 1/2 percent, whereas you could’ve got that same 30-year (rate) at the beginning of the year at 3 1/2 percent. But it doesn’t seem to slow down the land market at this time.”
Iowa State University Extension economist Chad Hart tells Brownfield higher rates should temper land values eventually.
“Interest rates will slow down the land market, but I think that’s the key word here. I think it slows it down (but) doesn’t necessarily reverse what we’re seeing here because there are other factors that have been pushing the land market higher as well.”
He says two of those are robust farm revenue and outside investors using farmland as a hedge against inflation.
Bill Mergen interview:
Chad Hart inteview: