Post by curiousgeorge on Aug 13, 2010 19:37:11 GMT
This is quite an interesting development. People are hot for farmland these days. Although the article attributes the phenomena to investors that are sick of the traditional stocks and bonds, etc. in this economy, I think there is more to it than that.
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Excerpt:
www.dtnprogressivefarmer.com/dtnag/common/link.do;jsessionid=4AD50494ABBB43F430315897C559FB37.agfreejvm1?symbolicName=/free/news/template1&paneContentId=5&paneParentId=70104&product=/ag/news/topstories&vendorReference=b88006fa-b53c-4980-88e5-e3a4e3a4d33e
U.S. homeowners are still smarting from a catastrophic drop in property values, the stock market is again sputtering, and the Federal Reserve is driving Treasuries to near zero interest rates. But bucking this gloomy trend is Midwest farm real estate, one of the few assets apparently immune to the nation's economic downturn............................
Hjelm likens the current farm real estate market back to 2008 when farmers were reinvesting profits from record commodity prices. What's different is that today's farmland buyers have money and are appalled at the returns on alternative investments. On the flip side, current land owners are holding on to properties just to earn a solid 4 percent or 5 percent return on rent and think of any additional appreciation as a bonus.
The listing shortfall is so severe that "buyers are going across the fence [asking the owner if he wants to sell] and are buying land before anyone hears it might be for sale," Helm noted.
Randy Hertz with Hertz Farm Management in Nevada, Iowa, said he wouldn't characterize the land market as hot as in 2008, but he does report strong sales. "There's just not much being offered for sale," he explained. So, the good land that is on the market has high buyer interest.