Think your home value is soaring? Talk to a farmer

DES MOINES, Iowa (AP) — Fourth-generation corn and soybean farmer Jeff Frank doesn’t feel rich, but simply based on the skyrocketing value of his land in northwest Iowa, it’s an apt way to describe him, even if he laughs at the idea.

He lives in the same nearly century-old house, grows veggies in the family garden and shops at the same grocery store about 15 miles (24 kilometers) down the road. “We live the same way we have all of our lives," he said.

Still, even if Frank's life hasn't changed, the several hundred acres he owns about 80 miles (129 kilometers) northwest of Des Moines have suddenly made him worth millions of dollars.

It may come as a surprise to city dwellers excited by their home values that countless farmers like Frank are actually experiencing a real estate boom that makes residential prices pale in comparison. While median existing-home prices rose by 15.8% in the U.S. last year, farmland values went up about double that rate in places like Iowa.

“I’m definitely surprised by the magnitude,” said Wendong Zhang, an economist at Iowa State University who oversees an annual farmland value survey.

The rising values, especially in the Midwest, are due to high prices being paid for the key commodity crops of corn and soybeans, plentiful harvests in recent years coupled with low interest rates and optimism the good times will continue.

But they're a mixed blessing. They're enriching farmers who already have a lot of land, but making it much harder for small operators or younger farmers starting out to get land unless they happen to inherit it.

Most purchases are by operations that see the value of larger scale, seizing the chance to buy nearby land.

“If you miss this opportunity, you may not get another chance,” Zhang said, describing the current mood.

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