Land Prices for Real Estate in Chicago on the Rise

October 27, 2012

chicago real estate land pricesCondos, high-rise apartments and new homes are usually the focus of our articles, so where does farmland fit into the equation?

In a survey by the Federal Reserve Bank of Chicago, it was reported that farmland prices in Illinois, Iowa, Indiana and Wisconsin rose 15 percent. What is important to note about rising farmland prices is that they affect bank lending standards. Bank regulators are worried that a farmland bubble similar to the housing bubble could occur, and this could potentially affect lending standards. If farmland prices continue to increase, banks will be less to willing to ease up their standards.

Economists say that any time there is an increase in land prices for real estate in Chicago, it is important for banks to be cautious about the way they distribute loans. There is currently a strong demand for farmland, so bank regulators are concerned that if farmers choose to buy more land than they can handle, this could cause land values to quickly plummet.

According to the Agriculture Department, net farm income is expected to hit $122 billion this year, which is the highest level since 1973. The reason is that corn and soybean prices are at record highs due to the recent drought.

However, as long as farmers purchase a manageable amount of land with a manageable loan, there won’t be any ‘bubble’ effect.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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