Springfield, OH | jdironman - 11/19/2023 20:37
I don’t disagree with anything you are saying, but to have a crash you generally have to have something mortgaged way over value. I don’t think ag is in that much trouble compared to office space and housing. I have no doubt if interest rates go up and corn price goes down we will have a correction in the land market, not a crash. In the 80’s it was a crash because a high percentage of land was mortgaged at high percentage of value. It will take a black swan event to cause a crash which is always possible. If land corrects 25% will it cause a crash? I don’t think so. My biggest fear is government debt and how they try and tax or regulate agriculture and what that will do to agriculture as we know it or a major depression that changes everything.
I could see a 50% correction. Land had historically been priced at 25x earnings now it’s close to 50x. All of this while interest has doubled, the numbers don’t lie. I’ve always tried to get perspectives from people that have a different opinion from me and this time their only argument is “it always goes up” I’ve bought land ahead of a correction and almost had to exit farming I don’t think I’m doing it again based on that argument. |
Kubs Den “ INSANITY OF PAYING 7% ON AN ASSET (FARMLAND) THAT ONLY EARNS 2%”
