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Land Prices Out of Control

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Trapshooter1

Well-Known Member
Hollow Timber River bottoms are bring 4-5k.
Deep black Farmland is bringing 17-25k(Recent Sioux County land auction)

And floody 55 CSR low land is being sold for 9-10k.

Where do people draw the line????

I honestly think the real estate market is on the brink of collapse. I'd say within 1 years we re in for a helluva reset.
 
I would say a bubble is very likely . The change will come when we have lower commodity prices and higher interest rates.
 
If they have the means to make the payments, I don't know if it will ever drop again. High interest rates may keep people from buying land in the future, but I don't know anybody who's sold land for a loss. If the seller can't get what they want out of it, they usually just sit on it. There's usually always a buyer though. Unless the seller isn't able to keep up on their payments. Those are more diamonds in the rough than trend setters.
 
I had a buddy tell me just yesterday that they were selling some pastures that were too far away to effectivly take care of their cattle. He said his biggest fear was not being able to 1031 the money before the tax deadline, because there is so much competition for ground. He said he would be willing to overpay to get something he wants closer to home in order to avoid taxes.
 
Obsessed said:
If they have the means to make the payments, I don't know if it will ever drop again. High interest rates may keep people from buying land in the future, but I don't know anybody who's sold land for a loss. If the seller can't get what they want out of it, they usually just sit on it. There's usually always a buyer though. Unless the seller isn't able to keep up on their payments. Those are more diamonds in the rough than trend setters.
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It's staggering how much you actually pay on interest every month if you finance land(even at low rates). Of course, you do get the tax write off every year to help some on the mortgage interest, but cash is king on land purchases.
 
Trapshooter1 said:
Hollow Timber River bottoms are bring 4-5k.
Deep black Farmland is bringing 17-25k(Recent Sioux County land auction)

And floody 55 CSR low land is being sold for 9-10k.

Where do people draw the line????

I honestly think the real estate market is on the brink of collapse. I'd say within 1 years we re in for a helluva reset.
Click to expand...
Dollar is still historically cheap and commodities are insanely high. Both will revert to the mean and most who overextended on credit will be in trouble. However, there are a lot of all cash buyers right now and most of them will make it to the other side. Speculators like acretrader investors who look to flip the property in ten years are going to come out losers
 
Trapshooter1 said:
Hollow Timber River bottoms are bring 4-5k.
Deep black Farmland is bringing 17-25k(Recent Sioux County land auction)

And floody 55 CSR low land is being sold for 9-10k.

Where do people draw the line????

I honestly think the real estate market is on the brink of collapse. I'd say within 1 years we re in for a helluva reset.
Click to expand...

This is really simple actually: look how much we expanded the money supply in the last 15 years. $/Acre is fairly proportionate. Sure, there's a rise between Covid/people wanting their own slice and cheap interest rates, but it's not super complicated. Land really isn't that over valued when pegged to the correct metrics. If anything, it was going way too cheap 30-40 years ago. 20 years ago $1k/acre was insane for recreational ground, today it's $4/k. If you're thinking it's insane, you're asking the wrong questions.
 
I think that the majority of people that have the ability to buy recreational ground will not be affected by a correction (if one happens) and rising interest rates. They will probably be better positioned to buy more if/when the correction happens, then someone that is sitting on the sidelines now contemplating whether to buy now or continue to wait for a correction.
 
My two cents is that I think there are enough rec ground buyers that aren't going to be affected by commodity prices & interest rates - I think most good rec ground pieces are unlikely to ever drop in value even if there is somewhat of a "crash" in the ag space (at least I'm not betting on it with my money).
 
I don't think people realize just how many dollars have been created out of thin air lately. Every new dollar that was created and not backed by some sort of wealth (product, service, commodity etc.) has lowered the value of every existing dollar.

5 years from today 25k/acre could be a bargain. Inflation, welcome friends to the new norm. This sucks!
 
The very first farm I looked at in late 90s in Iowa was $800/acre. Decatur County If I remember correctly … crp/timber .
 
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