The ending of QE3 and land values

[Thinkin Rut]

As interest rates rise, do you think there will be a modest, moderate or a massive land value correction? Maybe you think values will continue to soar. Lets here your thoughts and reasons why.

 

[hoosierhunter]

Weathly individuals will always have disposable income to spend. I see the correction coming from grain prices and then trickling down to land. If tillable drops then so does recreational land. Farmers who overextended banking on high grain will have to sell off if it falls.

Slight correction yes but not what it was unless the stick market tanks again as well. Many factors have to align that honestly is not what we want to see for the US in general....

 

[JNRBRONC]

Most of the recent land purchase were either cash transactions or large % cash down payment. I read the numbers in the Wallace Farmer last month.

Interest rates and grain prices won't impact those purchases, but rising interest rates will maybe cool the market a bit.

 

[Earnhardt]

Yes high crop prices are one of the reasons for high land prices.
One of the other reasons, is that land, and the rent that collected off of it for farming, are one of the few "safe bets" for large investors now.
Land prices will stay very high as long as the money/stock markets are volatile. Because large investors will falsely inflate the value of the land, due to the fact that there are very few places for them to safely invest.

 

[Daver]

Most of the recent land purchase were either cash transactions or large % cash down payment. I read the numbers in the Wallace Farmer last month.

Interest rates and grain prices won't impact those purchases, but rising interest rates will maybe cool the market a bit.

The bolded statement above is super key to me. If people are buying land with cash by and large, and not leveraging themselves with debt, and the stock market becomes less attractive to investors, it is quite conceivable to me that land prices could go up yet. Simply, land could become an even better investment.

There are many other variables to consider and if I knew any of this for sure then I would either be buying or selling some land myself.