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NWIA | I see your point and would like to think that it is kinda true. We had a similar thing happen here. About 20 years ago $3000 an acre was 'high' and every year after it kept on getting crazier and the coffee shop talk was "they're crazy, they're going to lose their farm." As has been the trend everywhere. I would say in the last few years things have been slowly going down. We've also had very sporadic sales. Some ground will bring 10-12 thousand/acre and some will bring 15,000 plus. Basically it shows what kinda cash people have laying around and that a piece that they really want probably won't go cheap. I do personally believe we will see higher interest rates, hopefully not double digits but close. This will definitely drive land prices down, that and the stagnant corn price. This makes for a bit of a scare because why would you, if you have to borrow the money, want to buy ground that wil be worth less next year, plus it makes things look terrible on a balance sheet and then you have a situation like what happened in the 80s. People that are borrowing against ground will also need to be honest about value on their balance sheet and that could also spell for problems. | |
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Psychology of land values
