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bad time to buy land?
so been thinking about land for awhile and not sure what i want to do...
but is this even a good time to buy ground right now? local real estate is insane..
also thinking about buying ground out of my home state
That’s a great question and we’re glad we bought it about a year and a half ago. Most indication is that property values are probably going to continue to rise, maybe not as sharp though, over the next 18 months. If I were a betting man and you can find the right piece, investment is good still But obviously not what it was even just six months ago. I’ve got a client who has stated that they’ve made a lot of money in real estate a little money real estate but never really lost. This guy is not in a speculative market but a long-term investment market. I agree..
If you’re plan allows a minimum of 10 year hold you should buy today.
Supply and demand. Right now there is a lot of demand for 'investments' of everything from land to stocks and bonds to ammunition to... Will it subside? You need to consult a gaggle of investment strategy experts. My gut says, it won't get cheaper.
I do know of two families that very sadly had to sell their prime hunting land just to keep their houses, cars and food on the table. There may be some deals that are good for the seller and buyer, unfortunately, because of how this time in our history has affected some of us.
Yeah, the wealthy are looking for solid places to put their money, and the 'land poor' need cash.
I bought my Ohio ground in March 2020 and just had it appraised for 2x what we paid for it.
It’s insane right now, but it may be the new normal.
Long term its almost always a decent time to buy land as far as value increasing. Not the best time to buy for getting the most for your money. You also have to value getting to use it now instead of 2 - 5 years from now if you wait in hopes of timing a dip.
Been looking for few years, seems to have definitely gone up even in out of the way states/places this year!
There are always deals to be had. Unfortunately, my 110 acre lease in Virginia got sold for less than $1600 an acre last year. I couldn't buy it because I had to buy my homeplace from my mom to keep her in decent memory care. Suggest looking for tracts owned by elderly people with no kids. Might find a deal.
IMO a lot has to do with where you're looking too. I know there are some deals out there but in the high demand states near the west coast....it's ugly. I've been watching Montana for several years now. Property prices were ok about 1.5 to 2 years ago. Since folks are fleeing the chaos in Cali, OR and WA...many are heading to WY and MT and over-paying for property. One 9 acre place I went and looked at in MT back in July ended up in a buyers bidding war and went for $55K over what I would have offered/paid. I know a realtor bud out there and last month he said things are slowing down some. He had numerous buyers from Cali who were contracting new listings at the high asking prices (on contention) sight unseen. They would then go there and then decide if they want it. If they liked it....they would pay the high price. If not....they would cx out of the contract. The realtors weren't worried as they were taking back-up offers and then closing the sale. I'm hearing some buzz prices are artificially high (a bubble) out there. From my personal agenda and alot of other prospective buyers agenda's.....it would be a good thing if there is indeed a bubble and it pops soon circa 2006/07 and prices come back down to earth. We can only hope.....
What’s it like in the US? Vacant land not very volatile here in MB. More of a slow rise
Property Tax Lien sales are also a real estate opportunity that is overlooked
It's only going up, and don't let anyone tell you otherwise. I spoke to an ag lender in Wichita yesterday, and he said foreign money is buying up a lot of marginal to poor dryland farmground in western Kansas and paying more than it's worth.
Vacant land as a whole seldom goes down. There are cases where land has to be sold so the sellers take whatever they can get in their time frame. Unlike houses there are not a lot of costs and up keep in owning vacant land. You can ignore it for years and it will be fine. Plus timber may be growing on it, it maybe be possible to lease farming and hunting rights. It seems that at slow times land sales just slow way down but prices do not go down. Land prices may stay about the same for years and then take a big jump but I do not ever recall them going down and I have owned vacant land since 1978. IMO the best time to buy land is when you find something you like in an area that you like and you have the recourses to buy it without putting yourself in financial peril. When I was a young my dad talked me out of buying some land because he knew that it was just not worth what they were asking based on his experience with 10 year old land prices. I had the money and wanted it but did not buy. I look like an idiot for not buying it now.
Two of us owned some land together since 1997 not too far from Pat's Ohio land. Probably around 2018 my partner, getting up in age was doing some estate planning and wanted to look at one of us buying the other out. We each got the land appraised but it is a difficult thing to deal with so nothing happened. Finally in 2020 he decided that he might die soon and we had to do something. We each got the land appraised again by the same people and the appraisals were 30% higher. I thought darn I should have bought him out 2 years ago and it was a bad time to buy after a big jump. However, it was fair pricing for the time so we signed the papers and I paid the higher price. It was the fair thing to do. I have not had it appraised again like Pat did but I am sure that it is worth a lot more today than I paid for it. We do mot knew what is going to happen.
With the ever looming sale of our family farm, I have been looking for my own slice of heaven for a year or so. The demand is high, but the supply is low. If a good chunk hits the market, you better be there money in hand. I was scheduled to tour a farm not too long ago that had just been out on the market less than a day. I got a call right before my appointment saying the first person to call bought it for above asking price. I suspect, the market will continue to price itself further out of my budget.
We bought real-estate (a vacation condo) at the high point of the market right before the 2007/2008 crash. It took almost 10 years for it to return to the value that we paid for it. This market is feeling the same way to me. I'd be leery of buying right now, if you're concerned about retaining investment value.
goyt: ignoring land for years does not work, you try that around here and you will get acres of worthless cedar trees that costs thousands to get rid of.
keepemsharp: good point. There are always advantages to paying attention. Good land management can help a lot. In Ohio the impact of neglect usually are not that severe.
Is it a bad time to buy land, no. Will there be a better time, maybe, maybe not. If you can buy and not over stretch yourself financially, I’d not sit and wait for a time of better prices, that may or may not occur. I bought in 2009. I paid probably 10%+ over what the land was worth at that time. The land was in the right location and the right size. The land has appreciated considerably since then. Could I have taken that cash elsewhere and made more, probably. Am I glad I bought, absolutely and would do it again in a heart beat. EDIT. And if you are going worry over a drop in value for a few years, best not buy. Land vale has and in my opinion will trend up. That means it may go down in value for a period, but over time will trend up.
I got a friend that is selling off some land . He told me that interest is low, crop prices are high and the feds are talking about raising capital gain to 40%. He think with the land prices being high is the time to sell.
My parents bought a farm in 1979 for $900 an acre. Then the early 80s happened, and the farm crisis and huge interest rates, and that farm was probably worth $400 an acre. Dad just stressed and stressed about it.
We had it appraised recently and it appraised for a considerable amount over the 1979 prices, like 5 times. I'm no financial guru, but I don't agree that you can look at these things solely from a financial standpoint either. If dad had taken that money through the years used to pay for the farm, and invested in something different, would it be higher, with a higher rate of return than the farm? I have no idea.
BUT, I now live on that farm, and have lived there for the past 8 years. I wasn't even BORN when they bought it. I'm building a house on that farm that I intend to die in. I will give this farm to my daughter. It's tillable and well located on blacktop. It's 8 miles from my parents. And 3 miles from my brother. It has other building sites if my daughter is interested or if one of my nephews is interested.
It's absolutely priceless to our family.
I was given some advice years ago by a farmer/judge: He said if you intend to buy land as an investment only, do NOT buy land within 40 miles of your house, because you'll never want to sell it. Fairly good advice really . . .
I have ought and sold over 200 homes and I am selling my rentals now. Land is the same. You make money by buying low and selling high. Land is high now. It is that simple.
Also interest rates have, by far, the biggest influence on land/home values. 1% higher interest rate and your land/house is worth 10% less. This is the single biggest, most important thing I have ever learned.
Interest rates can only go up. That said your payment also goes up..................
I was up to 25 single family homes (rentals) I am down to 6 now. Sold 6 this year and 8 last year.
Prices will go down in 2022, a lot by 2023. I think at least 20% down in 1-1/2 years.
I wouldn’t buy a house or land in this market. We’re heading into another 2007.
always bought the land , minmum 20 acres. built then sold 10 yrs later. always made $. My current place I paid 750,000. Another 250,000 to fix up the house. appraised 7 months later 500,000 more. Always a good thing.
Thornton's right. A section of bad grass pasture next to ground we hunt in Western Kansas just sold at an auction for about 20% more than it's worth and with no water. Bought online at the auction from a man in China who is buying up a ton of ground. Crop and pasture in western KS. My friend said the same man bought 20 sections this summer.
China wants our beef so it looks like they are going to feed and raise them themselves here in the US. Feedlots and packing houses are probably next on his list.
A good buy is a good buy, regardless. I am still buying.
If you buy land you can hunt and recreate on it. Try doing that with a mutual fund!
Not sure we will see a crash in vacant rural land anytime soon. Totally different market than flipping condos, houses and or commercial real-estate. Yes there has been a sharp upward trend since the pandemic. It may level off but doubt it will sharply decline. I am in no means a expert, just my opinion and observation ... I have rural property in AL and WV and recently started purchasing in Northern Michigan all long term investments.
Totally agree with Tim Floyd. Vacant ground prices are a different market than houses and especially resort/vacation properties. I've watched condo prices on the gulf coast for years and they are constantly up and down with wide swings. Buying ground in the right place at the right time is tough to do, but the time to buy is when it's for sale. Most ground doesn't change hands that often.
If you have the money buy now! They ain’t making anymore land, and I’ve never seen it depreciate, unless they log it and it looks like Mars.
These last 3 posts nailed it when it comes to vacant land and when is a good time to buy.
The panic to buy was there in 2006/07.....until the bubble burst and folks got stuck with over-priced places and couldn't sell them without a significant loss. I almost got caught with an over-priced house in southern Maryland when I got orders to Wash DC. Got scared when financial folks were talking about this bubble-thingy. I ended up renting a place and thank God I went that route. Fast-forward to today and I've seen a financial pundit or two make some comparisons between 2006/07 and now. Maybe the newest bubble will pop....maybe not.
Check out The land podcast,it is very good about everyday people buying land
IF you buy now and have to wait 10 years for the value of it to go down then back up as Grey Ghost said. What have you lost? What have you gained? 10 years of use and enjoyment. You only have so many years . Who cares if it takes 10 years? It ALWAYS goes up , 10 years is a blip. I have been buying land since 1990. I am in contract to buy more right now. If it goes down for awhile you get to use it. If it goes up more you get to use it. If you don't care about using it then your treating it like a stock and who knows short term ? Not me. Of course always try to buy the best value in the area. Its funny how I always think I paid too much for about a year.
I’m one year out from purchasing 50 acres behind the house. It’s only good for deer and ducks. Its one of those situations that’s it’s to good to pass up. Premier deer hunting (southern MI) and it’s out my back door.
Lots of good and varying input. Pyrannah has not indicated what his objectives are. If the goal is to buy hunting land for the long haul that can be improved for hunting with no short-term desire to sell it for a profit the market only impacts how easy or hard it is to find what you are looking for. Once you own it the value is not that important until you want to sell. If the value goes way up and taxes with it, is that a good thing? I had a piece of property change hands adjacent to mine that I would have purchased if I knew about it. I spoke with the new owner and he told me that he heard that they were looking to sell so he contacted them and bought before they put it on the market. He had been running around looking for property for months and everything was selling before he could respond. That makes this a bad time to buy if nothing is available. In short if you find it and it is what you are looking for, I would recommend buying it. Trying to time markets is so difficult.
Investmenting goals are buy low and sell high. It's high now. It really is that simple. Land values do NOT always go up. Wait 1-2 years it will be at least 20% cheaper. If you ignore the investment angle then the question is pointless. The answer is buy. The only reason for asking the question is as an investment.
They or god are not making any more land, and all investments are swings and roundabouts.. Land will only rise over time and in the mean time you may off hunted- fished- camped- grown crops- leased it out- subdivided it,[small parcels are worth more] put some cabins on it and air bnb rural holidays for city folks, whatever just be inventive about your options..
The competition for land right now is fierce. Will it go down, maybe... but assuming these rates stay close to where they are today, I highly doubt it. There is considerable wealth and people spending tons of $$ on land even in this crazy economy. I just bought a piece of ground where it was listing for $4,400 an acre for $3,100. Have to do your research, have good connections to the area where you want to buy so your on top of folks selling before it hits a big high priced realtor, be patient and pounce when the oppty is right. I wouldn't wait, start looking now.