Land price inflation may be slowing, says Iowa State Economist Mike Duffy. He says the average price of land has risen for nine consecutive years, but the indicators point to a slowing as the national economy battles recessionary pressures.
He adds that lower grain prices and higher production costs mean lower net revenue, which moderates values.
But land values will not go into free fall, says Duffy, who says the price trends of the 1980s will not be repeated. He expects a return to more normal conditions and not “unbridled exuberance” seen over the past 24 months. He also expects a retreat from the high prices, but is uncertain where they will go in the next year or so.