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Real estate, especially farmland, in Iowa seems to be growing at rates to match the speed which corn and soybeans grow on that land. After a dismal recession, agricultural land in Iowa has made a comeback whose peak we still have not seen. Not to put a damper on the situation, but the value of the land still has not reached the heights reached in the 1970s after adjusting for inflation. But the direction is still what counts, and prices have risen about 6% since last July, enough of a rise to make investors stand up and take notice, entering the market to buy and sell.There are those who would warn caution, such as the president of the Federal Reserve Bank of Chicago, Tomas Hoenig. He warned last week in Omaha that he sees “prices rising above what the productive capacity of that land can support.” He is worried about a bursting, bubble.But there are others with a brighter outlook, such as Brad Hames, an Iowan real estate broker. Brad Hames believes that “there is a significant safety net between debt and asset values, which I am confident will help keep the value of farmland from turning into a bubble. Rather than a bubble, I see a solid edifice on which the entire Iowan economy can find support.”
