Got bad news for you, America: We may have another real estate bubble. Farmland.
This morning, The New York Times reported on the continuing growth of sales prices for farmland across the country.
Across the nation’s Corn Belt, even as the worst drought in more than 50 years has destroyed what was expected to be a record corn crop and reduced yields to their lowest level in 17 years, farmland prices have continued to rise. From Nebraska to Illinois, farmers seeking more land to plant and outside investors looking for a better long-term investment than stocks and bonds continue to buy farmland, taking advantage of low interest rates.
And despite a few warnings from bankers, the farmland boom shows no signs of slowing. Almost every year since 2005, except during the start of the recession in 2008, agriculture land prices have posted double-digit gains. In the same period, the Standard & Poor’s 500-stock index has had double-digit gains in only three of those years.
The Times isn't alone in sounding the alarm. A search for "farmland bubble" on Google News returns hundreds of results dating back months.