U.S. farmland's value is deliberately climbing as commodity prices also steadily rise, Bloomberg reports.
During the fourth quarter of 2010, central U.S. farmland gained more value than any other quarter in more than two years, the Federal Reserve Bank of Kansas City said on Thursday. That news sits very well in a region that has seen scores of manufacturing jobs vanish as a result of the deepest recession in 70 years. Consequently, those job losses have pushed down home and commercial property values.
"In the next year to two years, I don't see a lot right now to indicate that it's going to take a nosedive," Iowa State economist Mike Duffy told Bloomberg. "What people have to remember is farmland is primarily bought by farmers and they buy it for the long term."
One-hundred twenty acres of farmland in Greene County, Iowa sold last month for nearly $1 million. Per acre, that sale price was 44 percent higher than the $5,701 estimate one acre averages in the U.S.
"It's reflective of what we're seeing," Duffy said of auction results. "There's just not a lot of ground offered for sale."
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