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Land prices / insane!!!

jlwdvm

Member
The only reason any of this would matter is if you are a speculator and are planning on flipping the property. If you plan on owning the property for a long time and have the ability to lock in a low interest rate now, what does it matter? If you are in fear of loosing your job o some other personal financial crisis that would prevent you from making payments, you have to consider your own risk tolerance as well.

Any cash you have in the bank is loosing 6-7% of its buying power as we discuss this.
 

Meyer30

Member
I would say there are a lot of factors pushing/propping up the land market (and stock market) now, but biggest factor is inflation in my opinion. The US dollar is becoming useless. Close to 40% of every US dollar ever put into circulation was produced in the last 18 months. Think how crazy that is for a second... So yes, land is probably more valuable, but the devaluation of the dollar is the main driver. Once all the smart people realized rapid inflation was happening, they wanted to turn their cash into a safe asset as soon as possible. Which has led to a huge demand rush for land. So high demand for land, coupled with inflation and low interest rates, has created a perfect storm. The amount of outside money that has poured in to the land market is crazy. In my area, the Mormon Church of Utah just bought 460 acres of 90 CSR farm ground for $17,600\acre.
 

BJohnson

Well-Known Member
"Close to 40% of every US dollar ever put into circulation was produced in the last 18 months. Think how crazy that is for a second..."

Yes, I had been told a similar statistic a few months ago and thought it was false but later read confirming information regarding M2 money supply. It's nuts what the governments around the world did in reaction to covid/pandemic in order to prop up or keep markets/economies from collapsing.

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JNRBRONC

Moderator
The amount of outside money that has poured in to the land market is crazy. In my area, the Mormon Church of Utah just bought 460 acres of 90 CSR farm ground for $17,600\acre.
As a tangent, I've heard that the Catholic church is the largest property holder in the US. Maybe time to look at the tax exempt status of churches?
 

jlwdvm

Member
...Again, a market drop really only effects short term flippers. Ask the people that have been sitting on the real estate investing sidelines for the last 5 years, waiting for the bubble to burst. It hasn't yet and most think it won't for another 2-3 years. Those investors will have lost 7-8 years of income from their money just waiting.
 

Hardwood11

It is going to be a good fall!
...Again, a market drop really only effects short term flippers. Ask the people that have been sitting on the real estate investing sidelines for the last 5 years, waiting for the bubble to burst. It hasn't yet and most think it won't for another 2-3 years. Those investors will have lost 7-8 years of income from their money just waiting.

There’s always people on the sidelines. I have a friend that says to me .. “ I can’t afford to buy land” …but has a $60,000 truck and drinks 5 cases of Busch Light a week !
 

Huntinguy

Active Member
The amount of outside money that has poured in to the land market is crazy. In my area, the Mormon Church of Utah just bought 460 acres of 90 CSR farm ground for $17,600\acre.

See this kinda pisses me off. I mean I totally believe in a higher power and giving to the church and also the needy. On the other hand when churches buy ground like this or have billions of dollars in savings, makes me mad. They preach give give give but seeming more like they just take take take. Sry but just think it's wrong!
 

Nrharris

Well-Known Member
See this kinda pisses me off. I mean I totally believe in a higher power and giving to the church and also the needy. On the other hand when churches buy ground like this or have billions of dollars in savings, makes me mad. They preach give give give but seeming more like they just take take take. Sry but just think it's wrong!
Also once an entity like that owns it, I doubt it will ever get sold again. Not a fan of it either.
 

BJohnson

Well-Known Member
Just an FYI, some of those church holdings were likely given to a church foundation as part of an estate plan. That is how my church "acquired" its farmland. Also, in some cases the donor restricts the ground from ever being sold.

Now if a "non-profit" entity is acquiring and being an active competitor in land markets, yeah that kinda rubs me the wrong way also.

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Sligh1

Administrator
Staff member
Here’s an update on land values from Iowa State in case you haven’t seen it yet.

I’ll own land til I die. It doesn’t matter if it goes down in value 90%… I’m keeping it. If it goes way down - I’ll probably buy more. If/when it’s lunacy- I’m pausing.
For folks who have $ that want land…. I think we all would agree it’s better buying land than the above mentioned $60k truck (or more like $70-90k), $1m house, boat, utv, etc. So- even in high market - we probably applaud those that take the long term plunge into their dream.

29% increase from the article. Crazy!!!! It’s a good read. Here’s one thing folks should think about….. in article it says “land is going up in price + farm income is going up as well” - a factor that drives up prices. For folks who are curious or even concerned about the short to medium- term future…. What this fails to acknowledge or mention is that those incomes have a very real, historical & likely chance of going DOWN in next couple years. When grain does go down $1 a bushel on corn or interest ticks up a bit- it will make that “emotional investor & tight margin operator” pull back or have issues. That will adjust prices. Correction or crash.
Corrections happen in every market. Like the weather - fluctuations are normal & to be expected. 1000000% agree - land is a far superior buy vs most the dumb stuff folks spend their $ on. & can’t agree more- if market doesn’t impact you- fluctuations are not a big deal. Long term- land, especially in iowa, is a good & enjoyable investment.
 
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Windlooker

Active Member
I’ve commented on this site several times over the years saying buy land now if possible. Land values will not decrease. Find a way and in 5 years you’ll say I’m glad I bought when I did. I’ve purchased several pieces, my last in Iowa was 2 1/2 years ago at 2100/acre. I won’t see that number again. Buy now. I’ve been on this site since 2003 and land has not gone down.
 
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Sligh1

Administrator
Staff member
Here’s a funny one - side topic - since farming & farms are almost my sole source of income & a topic I deal with every day…. Buyers, sellers, farmers, owners, investors, etc. I’ve owned land since 2001 (saved $ - since about 1991 when my uncle died & land was sold - from my lawn mowing business I started that year at about 11 years old). It’s interesting seeing these cycles.

Observationally, In 2013-2104 a lot of folks I talked to were doing 3 things: dozing out every last acre they could get, paying far higher prices on ground & THE FUNNY ONE…. “How much to buy out the CRP contract so I can farm it?”

2015-2017 had a cool down of rent/commodity prices. About half the previous corn/bean prices of ‘13. Good # of folks got some tillable into crp at great rates saying “dang man, my rent & income is down, I gotta put in crp!” Some held out & didnt enroll. I knew a lot of folks who were at the $300 mark on crp who decided to continue to rent it. When cash rents got to $150- they kicked themselves for not enrolling.

Then- 2 years ago, as prices were still low “new crp sign up!!! I’m enrolling - even though it’s a low rate!!!” I did some of that myself. Ha! Literally within 6-12 months - commodities spiked fast!!!!! Most who enrolled were kicking themselves. A lot canceled their sign up. A lot asked the same question “how much to cancel the 1-2 year old contract?” & some paid $ or just cancelled. Now the crp rate is back up & same folks aren’t enrolling “I want higher cash rent”….. the cycle could repeat. It’s ironic!!!! **i signed in some rough stuff at lower rates. I didn’t pull it. I’m not playing that game. It did cost some $ opportunities but oh well. It’s great for rough soil to have a 10 year break, enhance wildlife & build soil. Wish I would have held out for higher rates but who could have predicted?!? Just crazy.

The good news!…. I sold one really nice farm after I found some great buys on several Hunter Biden Art pieces …. Probably the only better place to have funds in this market!! :) ;)
 

letemgrow

PMA Member
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mrush

Member
Wow, great points brought up here! A wealthy neighbor that farmed his whole life said he had overpayed for every farm he had ever bought at the time he bought it. I know another guy that’s rents almost all the ground he farms and has done so his whole life. 2 different approaches. One guy I’m sure borrows money regularly and the other owns a bank. I guess the point I’m trying to make is that being cautious not to overpay for a farm can cost you. Lol. Use your best judgement but don’t be afraid to pull the trigger…..


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C-LINE10

Member
Wow, great points brought up here! A wealthy neighbor that farmed his whole life said he had overpayed for every farm he had ever bought at the time he bought it. I know another guy that’s rents almost all the ground he farms and has done so his whole life. 2 different approaches. One guy I’m sure borrows money regularly and the other owns a bank. I guess the point I’m trying to make is that being cautious not to overpay for a farm can cost you. Lol. Use your best judgement but don’t be afraid to pull the trigger…..


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Have bought 3 farms in the last 25 years and at the time thought we paid too much for every one of them. It always seemed too high until a year or two later:) 85% of the farm ground has been in some sort of CRP the entire time, the rest being farmed. Different pieces changed from CRP to crop and vice versa from time to time depending on contracts etc.
 

IowaBowHunter1983

Super Moderator
Staff member
One of the biggest keys to buying land is actually pulling the trigger. Once you have it is addicting and you'll be looking to add more (in most cases)!
100%. My first land purchase in Iowa 7 years ago was 8 acres. EIGHT.

It's been an incredibly fun transforming landscapes. Changes that will last well past my lifetime. I enjoy this part of it more than hunting anymore (I love hunting still for the record ;) )
 
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