What are Land Prices doing?

I cannot tell you how much I have enjoyed writing this blog. I enjoy sharing knowledge and experiences and it causes me to read and research different topics.

I am often asked about land prices… are they getting better?  It is getting more difficult to track prices due to amount of transactions. I have had this discussion with other land brokers and appraisers. There are fewer and fewer sales to look at some, so the analysis becomes more difficult.  Intuitively, I thought prices had bottomed out about 1 -2 years ago and had remained sort of flat since then, my research proved otherwise. I have included a chart as a visual aid to this article. To begin with, the land prices are average prices for a 3 county area located between Columbus and Lagrange (Meriwether, Harris and Talbot). Columbus is the third largest city in the state of Georgia. Therefore these prices may be much different than the area you live in. The numbers are interesting,  but trends are what we are focusing on. The graphs covers Price Per Acre from 2007 to 2012.

 Many areas are experiencing improved activity in their housing market (this is a localized phenomena). Many areas maybe most areas are experiencing flat prices. Some have predicted we are at the bottom, let’s hope so.  Housing will lead the way and land will follow later. Everyone needs a roof over their head and a bed to sleep in, you do not have to own land. Land is an investment and the buyer has a very different profile from the home buyer.

What does all this mean, I’ll tell you!

For Sellers…. If you are planning to sell, you have to be properly positioned in the market place. No one knows when these prices will recover or how long it will take. Your property has to be priced based on the market not some emotional, pie in the sky number. Sometimes a bird in the hand is worth 2 in the bush and you miss out on opportunity cost. The money from the sell of your property may be better off paying off debt or buying other assets. You can use a 1031 exchange and prevent a tax event,  if buying other like kind assets.

For Buyers…. It is a great time to buy!  Why wait, prices are low and so are interest rates. Land is a great way to diversify your portfolio, I own land as well. If you buy the right tract, it will generate some cash flow along the way, maybe from thinning some timber, leasing the hunting rights, farm rents and other techniques. That tract of land can offer lasting memories with the kids and grand kids, riding ATVs, fishing, hunting, hiking etc.

For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at      (706) 457-0090