Land prices / insane!!!

[sep0667]

I love the frugal talk. Thats something I have been a master of since I was a kid. It just comes down to wait someone's priorities are. and how bad you want it.

At work I have a couple buddies that would love to buy land, but yet they eat out atleast once a day, one smokes a pack a day probably. Both have newer $ trucks, going on nicer vacations. We have literally the same exact job. I bought an 80 acre farm a couple years ago, but i hear from them how it 'must be nice'. Its up to the individual.
Do you drive cheap used cars, not even worth 5k? My truck is only driven when I actually need to use a truck and its an old 97. Do you buy store brand peanut butter, not skippy? Do you have a smaller house in the older part of town or newer construction in the new development? Do you make due with an antenna for tv or do you have cable & internet and 3 streaming services? Do you go on a fancy cruise vacation or do you do something local? Do these things the frugal way will quickly get you out of debt and building wealth. But they buy a new bow every couple years, have new binos, new camo, stop at the gas station every day to buy snacks, etc. All these little things add up HUGE in just a few years! Form good habits and stick to them, each small individual act may not be much but together they are very powerful. I only live 5 miles from work, I bike to work & bike sometimes.

Its not hard to make an extra 15K+ a year if you really want to as well. Get your push mower out and get 3-5 customers. Get your snowblower and shovel out and do some driveways. Do some yard cleanups. Donate plasma. Work OT or get a second part time job. Do these extra things for a few years and you can have 50k cash. Shoot, for a while even when I would see someone on the community facebook page past they have a bunch of bags of cans set out for whoever wants them I'd go grab them quick! I ride bike all the time, i use to bring a couple plastic sacks and would pick up cans, it was actually a lot of fun! Literally almost every day for a few years I was doing something to earn a few extra bucks, and they were not all that time consuming, I still had plenty of time to hunt, bike, watch tv etc.

Im weird I guess, 99% of people I know wont do these things. They are to proud, they are above it. I understand some of things I did was probably a little extreme, and I dont do all these things anymore, but for a few years they were substantial in building dollars.

**I also think its important to note that just saving money in a regular savings account is costing you. Make your money make you money. Open up high yield savings account, most are earning about 5% right now. Invest more into a brokerage, just buy the US total stock market fund, VTSAX with vanguard or FSKAX with fidelity...yes, the market goes up and down, but just like land it always trends upwards long term. Just having a bunch of money sitting in a regular savings account with usbank or wells fargo is not a good use of it, at the minimum put it in a high yields saving account.

 

[Snail3496]

Love this thread

 

[IowaBowHunter1983]

I love the frugal talk. Thats something I have been a master of since I was a kid. It just comes down to wait someone's priorities are. and how bad you want it.

At work I have a couple buddies that would love to buy land, but yet they eat out atleast once a day, one smokes a pack a day probably. Both have newer $ trucks, going on nicer vacations. We have literally the same exact job. I bought an 80 acre farm a couple years ago, but i hear from them how it 'must be nice'. Its up to the individual.
Do you drive cheap used cars, not even worth 5k? My truck is only driven when I actually need to use a truck and its an old 97. Do you buy store brand peanut butter, not skippy? Do you have a smaller house in the older part of town or newer construction in the new development? Do you make due with an antenna for tv or do you have cable & internet and 3 streaming services? Do you go on a fancy cruise vacation or do you do something local? Do these things the frugal way will quickly get you out of debt and building wealth. But they buy a new bow every couple years, have new binos, new camo, stop at the gas station every day to buy snacks, etc. All these little things add up HUGE in just a few years! Form good habits and stick to them, each small individual act may not be much but together they are very powerful. I only live 5 miles from work, I bike to work & bike sometimes.

Its not hard to make an extra 15K+ a year if you really want to as well. Get your push mower out and get 3-5 customers. Get your snowblower and shovel out and do some driveways. Do some yard cleanups. Donate plasma. Work OT or get a second part time job. Do these extra things for a few years and you can have 50k cash. Shoot, for a while even when I would see someone on the community facebook page past they have a bunch of bags of cans set out for whoever wants them I'd go grab them quick! I ride bike all the time, i use to bring a couple plastic sacks and would pick up cans, it was actually a lot of fun! Literally almost every day for a few years I was doing something to earn a few extra bucks, and they were not all that time consuming, I still had plenty of time to hunt, bike, watch tv etc.

Im weird I guess, 99% of people I know wont do these things. They are to proud, they are above it. I understand some of things I did was probably a little extreme, and I dont do all these things anymore, but for a few years they were substantial in building dollars.

**I also think its important to note that just saving money in a regular savings account is costing you. Make your money make you money. Open up high yield savings account, most are earning about 5% right now. Invest more into a brokerage, just buy the US total stock market fund, VTSAX with vanguard or FSKAX with fidelity...yes, the market goes up and down, but just like land it always trends upwards long term. Just having a bunch of money sitting in a regular savings account with usbank or wells fargo is not a good use of it, at the minimum put it in a high yields saving account.

Mic drop.

LOVE this post.

"Must be nice" one of my most despised phrases of all time.

All about priorities. In MOST cases, if people were honest with themselves they should be saying "that's not my priority" as opposed to "I can't afford it"

I started in housing in my real estate life. Litterally lived on ramen noodles and hot dogs to make the first flip house work.

PS. Skip and I have bantered for years about renting vs buying re houses and their investment value.

 

[jflournoy]

Mic drop.

LOVE this post.

"Must be nice" one of my most despised phrases of all time.

All about priorities. In MOST cases, if people were honest with themselves they should be saying "that's not my priority" as opposed to "I can't afford it"

I started in housing in my real estate life. Litterally lived on ramen noodles and hot dogs to make the first flip house work.

Bingo.

 

[Thinkin Rut]

Don't forget your health so you can enjoy what you've worked and sacrificed for, and don't just buy the land, make sure you live it!

 

[Slick]

Good stuff indeed…..I was fortunate enough to know My Grandpa very well. His mom and dad came over from Ireland and tried farming in South Dakota which did not work out for them. They then moved to Chicago and the great depression hit. He said food was hard to come by and there were 9 kids. When he was 12 and his brother was 14 they stared jumping trains in the spring and fall to find work. He said it meant two less mouths to feed for his parents. They would go to Missouri in the spring and find farm work then Canada in the fall for harvest. He remembered coming home one of the times and he and his brother sat on their moms lap and she cried for 30 minutes just happy they were all right. No phones and no communication at the time. Between those times while they were in Chicago they would walk to the ship yards each day in hopes that a ship came in and they would be paid to unload it. If you have been in Chicago you might know the road “Half day road”………various stories why it is named that but for him it was because getting to Chicago and back was about a half day walking. He said they always asked others what they had to eat while walking and the joke of the day was “Jam sandwich” which actually meant 2 pieces of bread jammed together with no jam. My son is now 12 and it hits home for me……I cannot imagine how his parents felt. He went on to be successful and have a good life. Every Thanksgiving until he died he would always say after the meal and everyone was sitting around. “I wonder what the poor people ate tonight”…………he was reminding us to be Thankful.



I guess I am telling this story because we got it made compared to other times in this world. If you want land the chance is there you just have to make it a priority. I do think you had more buying power in the past no doubt.

 

[2-bucks]

I love the frugal talk. Thats something I have been a master of since I was a kid. It just comes down to wait someone's priorities are. and how bad you want it.

At work I have a couple buddies that would love to buy land, but yet they eat out atleast once a day, one smokes a pack a day probably. Both have newer $ trucks, going on nicer vacations. We have literally the same exact job. I bought an 80 acre farm a couple years ago, but i hear from them how it 'must be nice'. Its up to the individual.
Do you drive cheap used cars, not even worth 5k? My truck is only driven when I actually need to use a truck and its an old 97. Do you buy store brand peanut butter, not skippy? Do you have a smaller house in the older part of town or newer construction in the new development? Do you make due with an antenna for tv or do you have cable & internet and 3 streaming services? Do you go on a fancy cruise vacation or do you do something local? Do these things the frugal way will quickly get you out of debt and building wealth. But they buy a new bow every couple years, have new binos, new camo, stop at the gas station every day to buy snacks, etc. All these little things add up HUGE in just a few years! Form good habits and stick to them, each small individual act may not be much but together they are very powerful. I only live 5 miles from work, I bike to work & bike sometimes.

Its not hard to make an extra 15K+ a year if you really want to as well. Get your push mower out and get 3-5 customers. Get your snowblower and shovel out and do some driveways. Do some yard cleanups. Donate plasma. Work OT or get a second part time job. Do these extra things for a few years and you can have 50k cash. Shoot, for a while even when I would see someone on the community facebook page past they have a bunch of bags of cans set out for whoever wants them I'd go grab them quick! I ride bike all the time, i use to bring a couple plastic sacks and would pick up cans, it was actually a lot of fun! Literally almost every day for a few years I was doing something to earn a few extra bucks, and they were not all that time consuming, I still had plenty of time to hunt, bike, watch tv etc.

Im weird I guess, 99% of people I know wont do these things. They are to proud, they are above it. I understand some of things I did was probably a little extreme, and I dont do all these things anymore, but for a few years they were substantial in building dollars.

**I also think its important to note that just saving money in a regular savings account is costing you. Make your money make you money. Open up high yield savings account, most are earning about 5% right now. Invest more into a brokerage, just buy the US total stock market fund, VTSAX with vanguard or FSKAX with fidelity...yes, the market goes up and down, but just like land it always trends upwards long term. Just having a bunch of money sitting in a regular savings account with usbank or wells fargo is not a good use of it, at the minimum put it in a high yields saving account.

A lot of good stuff in this and others posts to help people look at their spending in different ways to help them get what they really want. My family growing up was very blue collar and frugal. Luckily that rubbed of on some of the kids. When I was in college (1990), my plumber older brother had a $40,000 boat. I asked him how he afforded it. He said all his coworkers would ask the same question. His answer was a lot like above. He was frugal, with the main thing being he never made vehicle payments. I etched that one in my brain and haven't made a car payment since 1995. Save up, buy good used, maintain it well, drive 8-10 years and repeat.

 

[Muskrat24]

I’m not trying to keep kicking a dead horse but some are are still missing my point. I am a lender and what someone could save up on and sacrifice a few years ago to own land is WAY different than with the numbers now that I posted last night. I am almost as tight as anyone here and know what it takes but incomes have been far outpaced by the increase in land values, interest rates and basic living. I get taking out the cigs and beer and vehicles will help but you are committing to that for 20+ years not a year or two. Those values came from ISU average land values. I see it professionally that there are people priced out of buying land now that could have made it work a few years back. Hate to squash dreams but you better be well above average Iowa household income.

 

[jflournoy]

I’m not trying to keep kicking a dead horse but some are are still missing my point. I am a lender and what someone could save up on and sacrifice a few years ago to own land is WAY different than with the numbers now that I posted last night. I am almost as tight as anyone here and know what it takes but incomes have been far outpaced by the increase in land values, interest rates and basic living. I get taking out the cigs and beer and vehicles will help but you are committing to that for 20+ years not a year or two. Those values came from ISU average land values. I see it professionally that there are people priced out of buying land now that could have made it work a few years back. Hate to squash dreams but you better be well above average Iowa household income.

I'm not going to call your expertise as a lender into question, and I definitely agree that land price increases have outrun incomes in the last few years. The southern Iowa hunting land market in particular feels like a bubble that is being mostly propped up right now still by a small segment of the market that are major big cash buyer investors, combined with still very low inventory. However, I also feel compelled to note once more that the ISU land values survey data is a countywide average. If we're talking about hunting land, and we're talking about an Iowa county that has tillable land (as every county in Iowa does), then the ISU survey "average" number is not the average for what hunting/combo land sold for in that county in 2023. Or land with 70% crp acres, either. In some cases, majority crp land actually sells for less than good hunting/combo land. All depends on individual circumstances. Looking at the bottom 2 tiers of counties in south central Iowa, the 2023 ISU countywide average numbers are almost all $1-2k/acre above what the average hunting/combo land was going for in those counties. 2022 avg numbers are way above what hunting/combo land was going for too. Higher $ tillable land sales in those counties were dragging the average up to a higher number. The most interesting data to me was the % increase in the avg from 2022 to 2023. By an overwhelming margin, the highest percentage increases in the avg. sale value number from 2022 to 2023 were in counties south of I-80, east of the I-35 corridor, with a number of southern Iowa counties having more than a 10% increase between 2022 and 2023.

 

[tall@wide]

What percentage of farms in Southern Iowa are being bought via 1031 exchanges over the last couple of years?

 

[Muskrat24]

I'm not going to call your expertise as a lender into question, and I definitely agree that land price increases have outrun incomes in the last few years. The southern Iowa hunting land market in particular feels like a bubble that is being mostly propped up right now still by a small segment of the market that are major big cash buyer investors, combined with still very low inventory. However, I also feel compelled to note once more that the ISU land values survey data is a countywide average. If we're talking about hunting land, and we're talking about an Iowa county that has tillable land (as every county in Iowa does), then the ISU survey "average" number is not the average for what hunting/combo land sold for in that county in 2023. Or land with 70% crp acres, either. In some cases, majority crp land actually sells for less than good hunting/combo land. All depends on individual circumstances. Looking at the bottom 2 tiers of counties in south central Iowa, the 2023 ISU countywide average numbers are almost all $1-2k/acre above what the average hunting/combo land was going for in those counties. 2022 avg numbers are way above what hunting/combo land was going for too. Higher $ tillable land sales in those counties were dragging the average up to a higher number. The most interesting data to me was the % increase in the avg from 2022 to 2023. By an overwhelming margin, the highest percentage increases in the avg. sale value number from 2022 to 2023 were in counties south of I-80, east of the I-35 corridor, with a number of southern Iowa counties having more than a 10% increase between 2022 and 2023.

Yeah I understand where you coming from. I just tried to be consistent with published data as I am not familiar with local land markets of all five counties randomly used. Two of the five I am familiar enough to say the ISU numbers aren’t substantially off and the scenario is around a 2% cap rate so again kinda cross checks out but not exact for sure.

 

[letemgrow]

It’s just seems as if we’re about to this point in the market, but maybe there isn’t a ceiling to be had….

Are a majority of these farms being bought without a loan?


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[northcedar]

My opinion, over here in my part of Class A+ IL soils, is that most farms are bought with loans. With 15-20K sales, the only ones that aren't are random 1031 exchanges.

 

[jflournoy]

It’s just seems as if we’re about to this point in the market, but maybe there isn’t a ceiling to be had….

Are a majority of these farms being bought without a loan?


Sent from my iPhone using Tapatalk

I can't answer this definitively, but I'll just say I talked recently to 2 lenders who do a lot of lending for rec/hunting farms in southern Iowa and they both said that new loan applications for those type of purchases had been super slow for some months now. So I'm guessing that the majority of purchases recently are cash transactions or 1031 exchanges.

 

[northcedar]

This 72 csr2 Ringgold Co field is up to $275 in a cash rent auction.

 

[Thinkin Rut]

I’m not trying to keep kicking a dead horse but some are are still missing my point. I am a lender and what someone could save up on and sacrifice a few years ago to own land is WAY different than with the numbers now that I posted last night. I am almost as tight as anyone here and know what it takes but incomes have been far outpaced by the increase in land values, interest rates and basic living. I get taking out the cigs and beer and vehicles will help but you are committing to that for 20+ years not a year or two. Those values came from ISU average land values. I see it professionally that there are people priced out of buying land now that could have made it work a few years back. Hate to squash dreams but you better be well above average Iowa household income.

If I had advice to someone feeling squeezed out of this market it would be stay the course. There is a greater chance than not that this will be coming down and the more prepared you are now will give you more options when that time comes.

 

[T_Max]

Thinking out loud and they may be one and the same. The price of land has clearly gone up. Is that because the value of land has gone up? Or because the value of the dollar has been so diminished? The value of the land to any one person may be the same as it was, but they now have to give more of their money to obtain it because the value of their money has gone down.

 

[jflournoy]

Thinking out loud and they may be one and the same. The price of land has clearly gone up. Is that because the value of land has gone up? Or because the value of the dollar has been so diminished? The value of the land to any one person may be the same as it was, but they now have to give more of their money to obtain it because the value of their money has gone down.

Just my opinion, but I believe all the money printed during Covid for PPP and just that was given to individuals has a direct correlation to the land market shooting up. Did inflation happen at the same time, yeah, but inflation didn't drive *demand* up to crazy levels all of a sudden.

 

[JBAGS]

Thinking out loud and they may be one and the same. The price of land has clearly gone up. Is that because the value of land has gone up? Or because the value of the dollar has been so diminished? The value of the land to any one person may be the same as it was, but they now have to give more of their money to obtain it because the value of their money has gone down.

Big part of it, IMO. I said this a while back in this thread.......

""Another thing I don't think gets taken into consideration much when people see high prices is the 40% (give or take) of inflation and reduced value of the dollar. A $3500-4000/acre farm a few years ago is now $4900-5600 farm. Same dirt, not really worth a whole lot more money but the number is a shock to look at.""

 

[Hardwood11]

Just my opinion, but I believe all the money printed during Covid for PPP and just that was given to individuals has a direct correlation to the land market shooting up. Did inflation happen at the same time, yeah, but inflation didn't drive *demand* up to crazy levels all of a sudden.

Definitely! We sold lake homes in Minnesota for crazy prices after PPP. That market is settling down now.

The farmers in my area like to buy a lake home within one hour of their farm so they can run home and till/spray if needed. Cash corn is now under $4, so that market is slowing too!