Continuing to go up.
They're making more people.
But they don't make more land.
Supply and demand.

The exception is isolated bubbles of over priced real estate, both land and homes, that pop and self-correct. Usually that is caused by speculators and flippers. Avoid.

Cheers

-Walter
Sugar Mountain Farm
in the mountains of Vermont
http://SugarMtnFarm.com/blog/
http://HollyGraphicArt.com/
http://NoNAIS.org

 

I agree. Unlike the housing market, land keeps going up. Soon acreages of any sizes will belong to the rich and the rich only.

 

I agree. Unlike the housing market, land keeps going up. Soon acreages of any sizes will belong to the rich and the rich only.

Or those of us who are dirt poor but land rich.

My stock graze on my other asset.

I have no savings, bonds (junk or otherwise), corporate stock investments, gems, furs, fancy cars or other such things. All that stuff is paper or otherwise worthless.

Land I can live on, harvest wood to cook with and heat my home, hunt, forage, garden and raise livestock on.

Cheers

-Walter
Sugar Mountain Farm
in the mountains of Vermont
http://SugarMtnFarm.com/blog/
http://HollyGraphicArt.com/
http://NoNAIS.org

 

At some time maybe within a few years or maybe 15 years, I think there will be a major collapse of land prices in most parts of the U.S., like happened between 1927 and 1932.

 

It'll go up in most places, maybe down in a few. I've always done better with land than stocks as an investment, and I agree with highlands about the use of it even if you don't see it as an investment.

 

At some time maybe within a few years or maybe 15 years, I think there will be a major collapse of land prices in most parts of the U.S., like happened between 1927 and 1932.

No way.

Now in certain markets that become overbuilt, you'll see land values go down. Primarily commercial and multi-family development land. Ag land, residential land, ranches, etc.- no way.

We saw it in the late '80s, when the S&L collapse happened. Just too much speculation happening primarily in commercial. But if nothing else, the '80s taught lenders a lesson. I don't think I'll see anything like that again in my lifetime. And I'm a commercial real estate appraiser.

 

they're not making any more land in japan either. yet their real estate prices declined for 14 years.

i think we're in a credit bubble that's close to popping, and much commercial and residential real estate will be hit. the subprime mess shows there wasn't a lot of lessons learned from the s&l crisis. how much of a decline depends on how frothy it got, which jobs stick around, etc.

that said, i think ag land will probably do well. there's been a 20 yr slide in commodity prices, and in inflation adjusted terms, commodity prices were the lowest in history in 2001. usually commodity cycles last 15-20 years. i expect cash flow to farms, and hence farmland prices, to rise during that time, assuming you paid an 'ag' price for it, not a 'subdivision' price.

--sgl

 

rfd,

location, location location is the best starting point. The next thing is the specific amenities of the land (water,pasture,timber, etc). People talk about land as a generic but it really isn't.

If I had to make generalizations, I'd say that generally, agricultural land out west is likely to be worth less over the next 15 years if you don't have the water rights to go with it. Predictions are that the draught conditions will be around for a long time.

Agricultural land in the midwest is going up at a nice clip because of high corn prices. I won't predict over the next 15 years but certainly over the next 3-5 I see it going up in value. Cash rentals are finally starting to move up compared to previous increases in land prices. This could set the stage for further increases in land prices.

On another note, if you are looking at it strictly as an investment you might want to buy land in the (Eventual) path of development.

Mobing right along, interest rates always have a big impact on land values. It's all about the carrying cost. Kiplingers finance has an interesting article in the August issue about investing in lands (they are talking about tracts in the 500 acre or more range). I think they paint an overly rosy picture but that's me.

You also need to consider the tax impact. If I had to pay regular property taxes rather than CAUV (Current Agricultural Land Valuation) my property taxes on the farm would be a lot higher. Because we actively work the farm we have a different tax treatment than if we were passive investors in land. Do your homework or hire a tax accountant that understands real estate, particularly land.

You also need to consider the impact of doing a 1031 exchange. If you can put off paying taxes (from the sale) on a property, that can be a valuable thing if you are looking at the long term.

Just a few thoughts.

Mike

 

Land dropped like a rock from when we bought the farm in 79 till we sold the land in 92.

We paid 190,000 for 235 acres with the buildings. In 86 dad declared bankruptcy and was told he had to move. Not knowing there was a moratorium on foreclosures at that time. Anyway he came back in 89 and found that if he deeded the land back to the FCA or whoever that he could buy it back for 57,700.
So I think land will cycle but I'm not gonna make a prediction as to when.

 

With the governments money printing presses running full blast, land is the only asset I have that keeps pace. Land that I paid too much for in the 80s has created a major opportunity for doing 1031 exchanges. Those exchanges have then permitted me to increase the acreage in areas outside of the "path of progress" and at the same time affords me a place to live that is not overly congested. We may see volatility in land prices but the recovery will be higher than the high prior to the drop. The key IMO is to have the land producing year after year and to consider that the interest on the investment. The land itself will appreciate separately and add value. There is nothing better than double dipping!

 

location, location location is the best starting point.

That is true. In most of the country ANY river front property is sky high. However land can still be gotten dirt cheap along a lot of the Rio Grande.

 

No way.

No way? Then why all the talk about TEOTWAWKI or WTSHTF?

Economic expansion cannot continue forever.

Us Christians among us believe something called the Tribulation may happen soon or eventually and I expect that will be real bad for business.

 

No way? Then why all the talk about TEOTWAWKI or WTSHTF?

Economic expansion cannot continue forever.

Us Christians among us believe something called the Tribulation may happen soon or eventually and I expect that will be real bad for business.

Why can't economic expansion continue forever? Not saying it will, but why can't that happen??

And I among "Us Christians among us".

Yes, if the Tribulation comes, property values might be affected.

 

Yes, if the Tribulation comes, property values might be affected.

But would you care?

 

But would you care?

Nah. But if somehow I got "Left Behind" :help: , as a real estate appraiser I would have to figure out exactly what the downward adjustment for "tribulation" is, to apply to my comps.

 

Secularly speaking (and not believing in science fiction scenarios of the future like Star Trek):

Economic expansion cannot continue much longer or to much higher levels on this world than it is now.

Everything is peaking at this time and will decline (in some cases, suddenly plunge).

Or to put it another way, what goes up must come down.

 

The value of agricultural land will continue to rise due to the production of ethanol from corn and other fuels they're concocting from agricultural products. We are a energy devouring monster and this monster mentality will not be stopped.

 

Land prices and the population of the U.S. could both double in the next 20 years or so. Not saying they will but they could. All that would need to happen is for China to send 300 million of their people to Mexico on vacation or for whatever reason. Then they could just walk across the border into the U.S. just like the Mexicans do. Shortly our population would double. Soon there would be an abundance of Chinese take out restrants, they would soon have plenty of money and the price of land could easily double.

 

Land prices may very well hold stable but watch for the foreclosures and auctions as the banks try to correct there balance sheets. With limited buyers with liquid assets there may be some real bargains. :dance:

 

Some of you are optimistic to the point of being unrealistic (imagine that of a REAL-estate appraiser).

I strongly believe this world will become a living-Hell before to many more decades, famine and pandemics if not major military conflict, and while land might be given away in the days to come, it couldn't be sold for in those lawless times to come, anyone who wants it will just take it, if they can.

Forget your portfolios, throw out conventional wisdom, grab onto something that will last. Land is for the having and using for the benefit of you and yours, not for speculation, for speculation (usery) is the main economic fallacy plaguing us all and ensures a guaranteed destruction of the living world.