In a van, down by the river. | To create the "forecast" line, I took the actual annual percentage price changes for the years following 1981, and then used those to extend the actual land values past 2015. For example, the surveyed land price in 1982 was 94.4% of the 1981 value, then in 1983 it was 89.1% of the 1982 value, in 1984 it was 90.1% of the 1983 value...and so on and so forth. In the seventh year, 1988, prices finally rose with 1988 values being 120% of 1987. I just took this sequence of percentages and started with the 2015 survey value of $8000 and carried it forward. Therefore, the red line is "what if things go the same as in the '80s" (at least in percentage terms). It will be interesting over the next decade to see if values actually revert to the average compound growth trend, or if that's just a bunch of bunk. In my case, waiting another 2-4 years fits my plan pretty well since I fit in the "wannabe" farmer category. |
Land Prices and Mean Reversion
