Land Prices
- Thread starter Elitebowhunter
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You can buy mostly timber for 1800-2900 depending on how good it is, how it lays, neighborhood, improvements, etc, etc. Lots of variables!! Start getting into 60% tillable & 40% timber and over (higher than 60 % of tillable) and you're getting into more expensive stuff the more tillable you get.
Get over to places like NE IA and prices go higher than I listed though.
Get over to places like NE IA and prices go higher than I listed though.
retiredmurph
Member
I live in south central Iowa Between Osceola and Creston I just purchase an additional 40 acres next to my 120 it is 30 acres of timber and 10 acres of hay It has very good deer hunting on it the main reason I bought it was because we have shot most of our better deer on it over the past 10 years. I paid $1600 an acre, 80 acres north of me went for $2000 per acre it was 75% pasture with timbered draws that hold deer. Just to give you an idea in this area.
Packnasty
New Member
I am definitely weary of buying now. Fortunately, I have youth still my side...and am willing to wait. I'm thinking that we may have to wait until a lot of the baby boomers start passing away before rec land significantly decreases in price.
The following chart (from ISU Dept of Economics), makes me think that there will be a surplus of available land very soon in the next few years.
The following chart (from ISU Dept of Economics), makes me think that there will be a surplus of available land very soon in the next few years.
We actually just went through 3 years of major decreases in rec ground prices. Ag ground is a totally different story. Rec ground has recently bumped up SOME but it went way down when the real estate bubble burst & economy tanked. When I saw things selling for $3,500 a few years ago, that same ground was going for $2,200-$2,500 after crap hit the fan. Rec ground is at a bargain VS 3-4 years ago- for sure at lower prices. It's for sure not at record high's like Ag ground is. IMO- if folks are hoping for $1k/acre rec ground, you ain't ever gonna own any cause it ain't gonna happen. Of course I don't have a crystal ball and nothing is for sure BUT I'll bet you see $4k/acre rec ground before you see $1k/acre rec ground IMO. Lot of this rec ground has already changed hands in last 10 years when prices started booming and farmers wanted to unload their "junk"- especially before things crashed and rec ground was really high.
cedar creek
Banned
You've got that right! Most timber land in north east Iowa is going for $4k/ acre or more now. When i was looking to buy timber ground 15 yrs. ago the experts were telling me ditches in eastern Iowa without a tree is worth over $1K/acre. I don't think you'll see much ground go for $1k/acre unless it's a sheriff's sale.
Hardwood11
It is going to be a good fall!
hillrunner
PMA Member
I wonder how many of the guys who said they were waiting for the market to drop ever bought land? This is pretty much exactly what our land price threads sound like today.
Hardwood11
It is going to be a good fall!
The pattern I’ve witnessed is land has doubled in the past 4-5 years no matter where it is. Minnesota, Wisconsin Iowa, Dakotas, etc..
This is combo rec/crop land without restrictive easements. 2500/ac land is now 5000/ac… for example.
Maybe a slightly higher jump in South Dakota. There were deals out there, not really seeing much now !
This is combo rec/crop land without restrictive easements. 2500/ac land is now 5000/ac… for example.
Maybe a slightly higher jump in South Dakota. There were deals out there, not really seeing much now !
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daniel93077
Active Member
Here’s where I struggle a bit. Back in August 2011 I considered rates/prices a pretty fair deal (though I was in no position to purchase at that moment in my life). And I’m not talking about the current me considering them a fair deal. I’m talking about the 2011 me thinking prices were fair.
I remember the 1996-2000 me looking at land prices and thinking they were an amazing deal. And I literally had no money to speak of at that time. And the land prices back then really were amazing.
The 2020 me definitely should have bought…but I was going through a major life/career transition and thought I had time…just another year or two until things settled out on my end and I’d be pulling the trigger…wrong. No regrets though. (Though it would have been nice to do that transition in 2018 or so as I’m 100% positive I’d have bought in 2020)
Today, I’m in a position to buy…but I don’t consider it a fair deal. The market feels overvalued mostly due to lots of excess cash combined with very low inventories.
I know land prices are going to grow over time and I’m not anti-growth but I am anti-expensive. Price matters and the value you get for your money matters.
Even when I look at land prices in Aug 2011 which I do consider fair…and run a scenario comparing it to let’s say the S&P 500 (which was fairly priced in 2011 base on earnings) the numbers don’t work our amazingly if you had to take a loan back then but at least it’s a reasonable trade-off for owning land….the cost/benefit analysis I run now for borrowing on land doesn’t seem nearly as optimistic.
All that being said, I concede that my crystal ball is broken and I really have no idea what’s going to happen. If the alternative to not buying land is blowing all that cash on whatever then I’m positive that land is the better alternative.
I feel optimistic the right time will come. In most cases (aside from finding undervalued properties) it’s just not right now if the only solution is taking out a loan to purchase the land .
I remember the 1996-2000 me looking at land prices and thinking they were an amazing deal. And I literally had no money to speak of at that time. And the land prices back then really were amazing.
The 2020 me definitely should have bought…but I was going through a major life/career transition and thought I had time…just another year or two until things settled out on my end and I’d be pulling the trigger…wrong. No regrets though. (Though it would have been nice to do that transition in 2018 or so as I’m 100% positive I’d have bought in 2020)
Today, I’m in a position to buy…but I don’t consider it a fair deal. The market feels overvalued mostly due to lots of excess cash combined with very low inventories.
I know land prices are going to grow over time and I’m not anti-growth but I am anti-expensive. Price matters and the value you get for your money matters.
Even when I look at land prices in Aug 2011 which I do consider fair…and run a scenario comparing it to let’s say the S&P 500 (which was fairly priced in 2011 base on earnings) the numbers don’t work our amazingly if you had to take a loan back then but at least it’s a reasonable trade-off for owning land….the cost/benefit analysis I run now for borrowing on land doesn’t seem nearly as optimistic.
All that being said, I concede that my crystal ball is broken and I really have no idea what’s going to happen. If the alternative to not buying land is blowing all that cash on whatever then I’m positive that land is the better alternative.
I feel optimistic the right time will come. In most cases (aside from finding undervalued properties) it’s just not right now if the only solution is taking out a loan to purchase the land .
Windlooker
Well-Known Member
I’ve responded to similar posts in the past. I’ve been on IW going on 21 years. This topic has spanned two generations; now beginning a third. I started buying rec ground in 1990. I’ve purchased several pieces and sold some. In that time the so called correction never happened, not once. Prices continued to go up. Buy when you can, find a way, sacrifice how you have to because in 5 years you’ll wish you bought 5 years ago. Some here have more experience than I, but my last piece was purchased one month ago and I’m looking for more.
They say the best time to plant a tree was yesterday....same for land...best time to buy was yesterday, second best time is today. Like you say, its some sacrificing but you wont regret it.
daniel93077
Active Member
The biggest risks are the things none of us can see coming. It's hard to forecast surprises.
I'm not sure I'm convinced an actual correction will happen in the sense that prices will drop precipitously but it definitely could happen. I do tend believe things are out of balance at the moment and eventually something has to happen to bring things back into balance. I could be completely wrong about this and even if I'm right it doesn't mean things can't get more out of balance before it gets back into balance. What that would look like I have no idea but could imagine a few scenarios. It could very well be something as simple as the market flattening out for a while, rates coming down, inventory increasing, etc. It could also be something far more painful.
Over the long term markets do go up and if we start at any date and look back 10 years in most cases we'd be wishing we could still buy land for the price it was going for 10 years prior.....that's most of the time...but not all of the time. That being said, if you made me place a bet on it today I'd still put money in favor of prices being higher in 10 years...because more times than not I'd win that bet.
I know recreational land in the sense of demand for whitetail ground doesn't have an extraordinarily long history but I think looking at the values of farmland in Iowa can give us a idea for what could actually happen to land prices. While it's unlikely we'd see prices drop like they did in the 80s I still think it's a good proxy for what could happen.
We've had a boom period in land for nearly 30 years as rates dropped from all time highs in the 80s, then of course we had a historically large infusion of cash while rates were historically low which drove prices up even more, and even now as rates have risen there is still plenty of cash sloshing around out there in the economy to keep things stabilized for a while...especially with the low inventories.
It's hard to say if a bust will ever come but maybe it'll just be a fizzle that bring back some sanity.
Thinkin Rut
PMA Member
For the guys on the fence, instead of waiting to buy your ground for 5 or 10 years waiting for something that may or may not happen, or worse, getting squeezed out all together...why not buy half of what you would ultimately like to own and locking in a price. Pay cash on the first half to save some coin and wait for more stable times to buy the piece you really want and sell your smaller piece.
Windlooker
Well-Known Member
Every time I purchased I believed the price was too high. Dont fall into the paralysis by analysis mindset. Yes, look hard and examine all variables but gotta pull the trigger at some point.
daniel93077
Active Member
This is where I’m at…buy what I have cash for (and even then I gotta feel the price is right). If I know for sure it’s a bargain or it’s a cash flowing investment property that I’m using as an investment vehicle to later 1031 into land I wouldn’t mind using leverage.
Windlooker
Well-Known Member
What’s a bargain to you?? It’s subjective. What I’ve seen lately is these land companies are taking the average price per acre, from tillable, timber , and pasture, as tallied by ISU every six months and making that the sell price. Every neighborhood is different of course but they’ve been getting that number. My neighborhood is great with a mix of tillable, crp, timber and running water ( Shoal Creek runs through many properties) creating awesome hunting. To each their own however numbers aren’t coming down.
I’ll also add the days of farmer Joe not quite knowing what he has are over. A quick call or net query with the many land companies have nipped that in the bud.
I’ll also add the days of farmer Joe not quite knowing what he has are over. A quick call or net query with the many land companies have nipped that in the bud.
Thinkin Rut
PMA Member
Because we don't know what the future land prices are going to be, you won't know if it's a bargain for 5 or 10 years. You would be securing half of your purchase in today's money, dollar cost averaging in a sense. You'll be half right or you'll be half wrong. You wouldn't want to over pay and you wouldn't want to buy just any piece. You want to buy less in quantity only...life might turn on you or just happen so you want to act like this IS THE PIECE. Your other choice to get you where you want to go would be the stock market. IMO the stock market is going to go down sometime in the next couple of years, whether land goes with it is debatable. Both are long term investments and neither are without risk. The whole deal with buying the land is you get to enjoy it while you wait...this process could take a long while to work through. Good luck!