Alton, Ia | 806 Southern In - 7/5/2022 17:17
I'll offer an alternative view. How many more farmers are flush with cash today vs 1981 and how many more millionaires from all walks of businesses are present today that were not present in 1981 who would jump on an acre of ground for sale. I in no way ever believe that ground will fall back to a 1981 scenario unless commodity prices vs inputs get way way upside down.
One of the problems since the mid 2000's, especially since 2008, has been the Fed's zero interest policy. CD's, bonds, etc. suck at returns, so the money flows into real estate, driving the return to comparable levels. 3% interest is abnormally, historically, very, very low. You can easily find 150 year charts of interest rates, the average over that time is 6-7%. We would be better off at 6%, interest is tax deductible, principal is not, and smart money managers are rewarded.
With the high principal per acre, $20,000 + here, it doesn't take much a bump in interest to really make a hit.
We went from $3400 in 1981 to $1100 in 1986 ish, and it took until 2003 to get back to $3400. 22 years is a long time to wait to get your money back on an investment. Can this happen again, of course not, this time it's different. |
1981.
