Nebraska Farm Real Estate Market Developments in 1982-83
Document Type Article
Publication by the Department of Agricultural Economics, Report # 133, June 1983. Website address is: http://www.agecon.unl.edu/realestate.html
The authors express their appreciation to the survey reporters for their participation in completing and returning the Nebraska farm real estate market survey questionnaire. Without their efforts and interest, the availability and publication of the data within this report would not be possible. Special thanks is also extended to the Federal Land Bank of Omaha for providing the farmland sales data for Nebraska.
Farmland values in Nebraska continued to decline during 1982. On the average, values as of February 1, 1983 were about 11 percent below year-earlier levels. The continuation of a recession plagued farm economy and stiff monetary efforts to combat inflation definitely contributed to this land market weakness.
In nominal terms, current land values are comparable to 1979 levels. However, after adjusting for inflation, current values in real (purchasing power) dollar terms are basically equivalent to those of .the mid-1970's.
For most areas of the State and most types of land, land values "peaked" by 1981 after nearly a decade of unparalleled appreciation. From these peak levels, values have declined an average of 14 percent during the past two years, ranging from less than 9 percent in the North Central portion of the State to a 17 percent drop in the Northeast and South. Dryland cropland with irrigation potential has experienced the most pronounced rate of value decline from these 1981 peak levels - dropping nearly 18 percent. While these levels of decline may seem rather severe, one must bear in mind that annual increases of this magnitude were commonplace during the "bullish" years of the 1970's.
Farm expansion still continues to be the primary reason for buying land offered for sale, implying active farm operators remain the major buyer group. On the seller side of the market, survey respondents ranked financial stress as the most frequent reason for selling land in 1982. vfuen asked specifically what percentage of farmland sales activity in 1982 was due to financial pressures, these reporters estimated that a third of the sales activity was due to this reason.