Not all that bad compared to the min-80's. Interest rates were 14.5% when I bought 7 acres and built our house. About a year later it dropped to 12.5 % so I refinanced to cut down on monthly payments, then a couple years later it dopped to 7.5% and I knocked the 30y mortgage down to 15 years. It stayed at 7.5 until I paid it off. I could have bought my Grandfathers farm (114 acres) for 180k, but those interest rates blew my dream!
SC iowa - a lot did. Guys renting considerable ground- i know dozens that closed it up. FCS called a LOT of LOC’s & wouldn’t renew a gazillion across the state back then. North 2/3rd of state - very few hung it up or forced out. So- regional, IMO.
This inflation deal doesn’t get better with lower rates, IMO. The numbers don’t make sense but we gonna have to see 2-3 years of low prices to see much slip in land prices. And probably no sales at that. Unfortunately this hurts the smaller producers and beginning farmers the worst.
Agree 100%. It “appears” inflation is slowing way down. My wild guess…. Inflation gets lower as we tilt towards recession & economy gets a bit rocky. This exact same scenario (almost) was here in 2015. Took til about 2017 for prices to go down & dag nab- they sure did!!!!
I can't deny this thought nor did I deny this way of thinking 4 or 5 years ago when many of us thought the same thing, land would buckle with everything that was ahead of it. The reality of it is, if we were buying back then, we would be whistling today. Now we are still waiting for that correction to send land prices down to a price that will be higher than it was when we originally thought it would correct 4 or 5 years ago. The larger point to be made here is it is very difficult to time any market.
This says a lot. What is market value? Is there a ticker tape that I've missed? Would your 10% of work that you put in be reflected in the price if you flipped it or would it be viewed as selling it 10% over the alleged market value? I guess my point is, there are soo many variables that affect price that it could very well exceed a 10-15% decline in market value. On the flip side, your 10% under "deal" could be a run down property with bad fences, bad neighbors and no kill history. IMO land values are about as grey as a new hunting regulation that the Iowa DNR came up with. A 10-15% pullback is really a normal pullback as it is with any long term investment and 20% or more is when it really gets meaningful. Possibly a good thread topic would be to determine how to navigate through all the variables and to discuss how those variables truly affect the value of the piece you're looking to buy. My 2
I'm sure the time frame when land and rates were lower just previous to the rates and prices now, there was a lot of cherry picking and an overall higher level of purchases in general. I'm sure there are some real duds and possibly some good properties sitting at too high of price now as there were also properties sitting when the market was on fire, priced too high even in that market. One should expect some kind of lull after that buying frenzy. I also believe there are "overpriced" pieces that are much more of a value than one priced at "real market value" that will sell. When I commented grey, I wasn't talking about the actual sale price but rather how they arrived at that price. I will be closing on a property in January that is well under real market value. I'm sure there are plenty sweetheart deals out there with the ageing farmer or his wife that sells to family or close friend. I'm sure you'll know the answer to this but curious on how that can skew the averages on any given year as these farmers pass the baton to the next generation in their circle of friends and family at lower prices.
Great point. To further your question ISU stats indicate about 80% of all land is transferred to family in some manner. Only 20% actually hit the open market.
Way more than I would have guessed. I wonder if that number will go down after this wave of baby boomers are gone?
I think lots of these older landowners are going to look for young farmers rather than selling at top dollar to corporate farmers or land investors (if no heirs in line). Just a hunch. Pretty confident they will avoid foreign investors unless the buyer hides it (has a front person).
In this era of shell corporations, I hope the state monitors this closely.Gov. Reynolds Signs Foreign Ownership of Land Bill into Law
Today, Governor Kim Reynolds signed SF 2204 into law, a bill for an act relating to interests in agricultural land acquired or held by foreign businesses...governor.iowa.gov
All the private sales I know of haven’t gotten any “deals” from family members. Basically saving the realtor/auction fee is enough for them. They just get offered first is the only “win” I’ve seen