Land market continues to ease

[blackpowder]

Your not in any ghetto farma.
Just not in The Corridor.

[farmaholic]

"Kids in the Hall"

[AlbertaFarmer5]

I've been reconsidering my long held belief that land is one of the best hedges against inevitable inflation. Based on my assumption that politicians and central bankers will always take the easy road with money printing, debt and the resulting inflation. Since anything less is political suicide.

Now we have a politician attempting the unpopular thing, and promising to eliminate deficit spending and the associated money printing and resulting inflation.

If they don't get spooked and change course, I think the rest of the world will be forced (kicking and screaming) to follow suit with responsible economic policies.

That could completely deflate the inflation hedge bubbles; real estate, stock markets, crypto, etc.

Assets might once again be valued for their productive capacity, rather than their potential appreciation.

[farmaholic]

Bought land in 1986 for 60 and 64K per quarter. Bought more in 2004 for 65K per quarter and in that time span it had dropped in value for a while.

I've heard people say it's different this time... ya it is... its 10X the value it was back then. I have no idea if a correction is in the near or far horizon, or at all.

[ry0972]

Bought land in 1986 for 60 and 64K per quarter. Bought more in 2004 for 65K per quarter and in that time span it had dropped in value for a while.

I've heard people say it's different this time... ya it is... its 10X the value it was back then. I have no idea if a correction is in the near or far horizon, or at all.

Yes, the current land prices are so far out of whack with productive value that I think there will be a correction soon.
From the mid 80's through late 90's land here was $20k to $40k per quarter, now it is $450k to $600k !!!!
And with interest rates on land mortgages in the 5% to 8% range on those values you are near the same as 18% on land purchases in the late 70's and early 80's???
I think that we will see a crash in real estate(housing and land) prices, just how long does it take? and how fast/far does it drop?

[wheatking16]

[QUOTE=AlbertaFarmer5;n815107]I've been reconsidering my long held belief that land is one of the best hedges against inevitable inflation. Based on my assumption that politicians and central bankers will always take the easy road with money printing, debt and the resulting inflation. Since anything less is political suicide.

Now we have a politician attempting the unpopular thing, and promising to eliminate deficit spending and the associated money printing and resulting inflation.

If they don't get spooked and change course, I think the rest of the world will be forced (kicking and screaming) to follow suit with responsible economic policies.

That could completely deflate the inflation hedge bubbles; real estate, stock markets, crypto, etc.

Assets might once again be valued for their productive capacity, rather than their potential appreciation.[/QUOTE

[LEP]

"Kids in the Hall"

More like "Trailer Park Boys"

With a tinge of "Duck dynasty" ????

[shtferbrains]

Following the above posts about land values vs productive capacity I'm offering this comparison.
Not a recommendation.

Enbridge pays over 6% dividend with 50% + growth over 5 yrs.

So if the $845k that a 1/4 section sold near here recently is the land price, it doesn't look like I will be considering that as an investment.

I have never sold land and have no plan to as it has been my best investment.

But I have zero interest in buy any more

[ajl]

I've been reconsidering my long held belief that land is one of the best hedges against inevitable inflation. Based on my assumption that politicians and central bankers will always take the easy road with money printing, debt and the resulting inflation. Since anything less is political suicide.

Now we have a politician attempting the unpopular thing, and promising to eliminate deficit spending and the associated money printing and resulting inflation.

If they don't get spooked and change course, I think the rest of the world will be forced (kicking and screaming) to follow suit with responsible economic policies.

That could completely deflate the inflation hedge bubbles; real estate, stock markets, crypto, etc.

Assets might once again be valued for their productive capacity, rather than their potential appreciation.

Makes you wonder what happened in the 80's. The the 70 they had a cycle nicely set up to print more and more and keep the inflation train rolling. Then in the 80's suddenly inflation became the enemy and central banker started fighting inflation by stopping the printing press. What convinced them to change course? In this last go round, they slowed up the presses for a while, but abandoned that idea last year and upped the money printing again.

[farmaholic]

Re land prices: Until there is a better place for investors to put money, because of poor appreciation of asset value or little to no ROI(rent/lease revenue) on land, prices may hold. In the last 15 years investors did very good with appreciation and even rent income when commodity prices helped push rental rates very high. Also supporting land values was well established farms buying more, also aided by high commodity prices(maybe with a false sense of those values being the new norm, aka 21/22).

We might be entering the "long-game" of farmland ownership.