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SW KS, near Dodge City | Interest rates don't have to go to 20% for it to have the same impact...
I don't know exact numbers... In the 80s, ground went to say, 4K/acre. Interest rates go to 16% (but they started from about 8-9%). So they went up 8%. Net impact of $320/acre.
Today ground is at 12K/acre. Interest rates at 4.5%. Interest rates go to 9%, only going up 4.5%... Net impact of $540/acre.
Yes, it IS different, but as with all things, there will be a LOT of similarities as the past. All things cycle up and down. Will that ground go back to 4k/acre? Probably not. I would agree that we have cycled to a higher plateau, but that doesn't mean that it won't come down. Even a 50% retracement in values still leaves that ground at well over what the peak then was. | |
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It IS Different this Time.
