Turning the corner in the real estate market?
- Thread starter Trapshooter1
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Snail3496
Active Member
You mean flat-billers!
Agree 100%. I hate it!! Not that it matters as $ & market will push people one direction & greed OFTEN wins. Not always though…. On the flip side of that…. The guys that hold on to say 500++ acres and make them bigger … vs chopping them up…. Those farms will become “very rare” …. IMO- the future value on “big farms” is gonna be stupid. Because there’s so few of them!! I’d much rather see a guy rewarded for selling a giant farm for a premium vs breaking it up.
I just bought a 400 acre chunk in iowa. It lays amazing. If u look at aerial… would break into 80’s, a couple 40 & around 100 acres - PERFECT!!! & I would make coin doing it. Could cash in TOMORROW!!! I will not break this farm up!!
tall@wide
PMA Member
Good points and i agree. Congrats on the new farm! You need to buy the 400 acres that borders me on the south when/if it goes on the market.
deerhunter93
Well-Known Member
As a wanna be landowner someday I want to tell the guys that flip farms to stay out of the "entry" level stuff and just flip farms for more wealthy people. And quit parceling stuff up. Time and time again I've seen people who love Iowa for the big bucks just take an 80 or a 160 and break it up. That absolutely has a negative impact overall. I also hate seeing properties get sold privately then literally a month later get listed for 40-60k more. Do they have the means and the hustle to do it? Yep. Is is a good way to make money? Yep. Does it irritate me because people who could have afforded the 180k purchase might not be able to afford the 230k purchase? Yep. But, that is life and there will be other opportunities.
With that being said, I can't fault them for it. Quite a few folks have made darn good money doing it and are enjoying some incredible farms because of it.
With that being said, I can't fault them for it. Quite a few folks have made darn good money doing it and are enjoying some incredible farms because of it.
deerdown
Well-Known Member
I believe I see some softening in the market, especially for Rec ground....is it wishful thinking?
I watch the market pretty close in my surrounding area and it "seems", even with the still small inventory, farms aren't being priced so high for the most part.... Sure, there's the one-offs that are, but many more seem reasonable..... Now the question is, is a 2% return reasonable when you can get 5.2% on a TBill? Well, that's another question relating to it's Rec value. A 3% difference on $700k, as an example, can buy a lot of experiences every year. And usually, when you own a farm, the expenses don't just stop with the mortgage and taxes. Equipment, insurance, seed, time, etc comes into play...
Just from a economic point of view, it's hard to make the numbers work......but, you can say that about most everything anymore, including the stock market....things don't make sense like they used to...... at least to me....I'm just not that smart to figure it out in todays world....it used to be easier
I watch the market pretty close in my surrounding area and it "seems", even with the still small inventory, farms aren't being priced so high for the most part.... Sure, there's the one-offs that are, but many more seem reasonable..... Now the question is, is a 2% return reasonable when you can get 5.2% on a TBill? Well, that's another question relating to it's Rec value. A 3% difference on $700k, as an example, can buy a lot of experiences every year. And usually, when you own a farm, the expenses don't just stop with the mortgage and taxes. Equipment, insurance, seed, time, etc comes into play...
Just from a economic point of view, it's hard to make the numbers work......but, you can say that about most everything anymore, including the stock market....things don't make sense like they used to...... at least to me....I'm just not that smart to figure it out in todays world....it used to be easier
Wi transplant
PMA Member
That 120 in moulton i believe i looked at last yr and its west boundary butted up against public hunting im pretty sure 40 acre pc of public . Thats was a deal breaker for me.
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Prices are softening. I’m seeing stuff go for around 10% less than maybe a year ago. Sustained high interest rates just continue to shrink the buyer pool. Now we have lower commodity prices on top of it. Both are “minor” but they make an impact for sure. We still are seeing prices propped up by the good old 40% more $ thrown in market + low inventory. Well…. That $ thrown on people does run out. It’s vacuumed up by the crazy wealthy little by little. IMHO- we are getting close to saying “all the $ the lower to middle class got showered on them is long gone”. When it’s gone, now they are stuck with every other cost being higher on anything they buy on top of running through their $.
Inflation blows up wealth of those on the top. It destroys those at the bottom. Huge scam perpetrated on the people by our leaders. As the low to middle get pinched, this will ripple back to the top SOME - in the form on less consumer spending. Low to medium quality farms will soften as buyers are fewer by the day.
The roi makes no sense for those wanting long term holds with 7%+ interest on assets spitting out 0-2%. Cash- no problem. The other angle…. If a farm on a shorter term hold is spitting out 0-2% on 7% interest BUT…. It’s appreciating at 5-10% or u can make it worth 10-15% more with fixing it up- makes sense. But- a lot harder when market is softening. & it is. Im still a land buyer but like ANYTIME- I’m very cautious & do believe we have softening here. I’m ready for a deep recession as well. Doesn’t mean I expect one…. Just ready if it comes. All of this stuff, every drop of above- has happened over & over & over in history. The real estate cycles are very real.