# Land Bubble



## Vol (Jul 5, 2009)

Continuing on with discussion of over-valued land.....and ol' Cy(swmnhay) is right in the epi-center.....and so is Gearclash and some others.

Regards, Mike

http://www.agweb.com/article/power_hour_the_land_bubbles_epicenter_NAA_Ed_Clark/


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## NewBerlinBaler (May 30, 2011)

Like I said a few days ago, not is NOT the time to borrow against your over-inflated land value and take on a lot of debt.

Gary.


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## Gearclash (Nov 25, 2010)

The land price bubble seems to have stopped growing, and is maybe receding. A week ago I went to watch two nice parcels of land sell two miles down the road. Both brought about 15,500. That's still too high, but at least 5,000 less than some of the top prices. Interesting to note that both parcels were bought by two separate bigger farmers.


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## swmnhay (Jun 13, 2008)

I'm thinkin so far the better ground has held steady here,but there was some lighter ground that was no saled at 5600 a few weeks ago.A few weeks before that some good ground sold at 13K.Guy that bought that just sold JD dealership so he had 1031 $ to burn.

I think the 13K land was the record high for Nobles county (Worthington)

I think the record high that I know of anyway for Sioux county is 20,500.Neil,correct me if I'm wrong.

Sioux county is very livestock friendly.Used to be a sign along the road stating most cattle of any county in Iowa.Also a lot of hogs and dairy.


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## Gearclash (Nov 25, 2010)

I think the top was 21,500. Not that a 1,000 more or less means much at that amount.

Livestock is no doubt a strong driver of land price here, as livestock raising generates both a need for land base, and also the cash flow to purchase. I don't know who bought the highest dollar land, but in most cases the people buying land have been those heavily into cattle and/or hogs.

I know for myself, if I had some land base rented or owned, it would make my cattle feeding potential a lot better.


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## swmnhay (Jun 13, 2008)

Gearclash said:


> I think the top was 21,500. Not that a 1,000 more or less means much at that amount.


I was driving threw that area and I could not tell which farm could be worth 21,500. 

Was it 1 N and 1/2 E of Hull?


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## Gearclash (Nov 25, 2010)

The sale a mile north of Hull that made the news was 20K. I think the top dollar was somewhere a few miles east of Boyden. There was a land sale west of Rock Valley where the price paid per point of CSR was higher than what it was for the 21.5K land, but the CSR number was much lower.


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## swmnhay (Jun 13, 2008)

Talkin with guy last night that was talkin with auctioneer.They have had 3 no sales on land the last few weeks in the area.

They had about 6K bids.Sellers wanted more.


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## deadmoose (Oct 30, 2011)

Good to hear the peak has come. $20k an ac? What could you actually farm on that that is legal to actually make it pay?


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## Vol (Jul 5, 2009)

Our land peak here for the most part occurred in 2008...but we do not have the robust fertility that is found in many regions of the Mid-west(exception is along the MS River..250+ corn grown there). But still yet, many folks are still asking and holding out for 2008 prices and its just not going to happen. So it makes acquiring additional land very difficult unless its at foreclosure.

Regards, Mike


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## Gearclash (Nov 25, 2010)

> $20k an ac? What could you actually farm on that that is legal to actually make it pay?


With the use of enough convuluted acounting, livestock. In reality it can't pay, and is only an overvalued investment.


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## swmnhay (Jun 13, 2008)

For some it is a place to park their cash.

The bank is not paying any interest on saveings.

Other ways some might justify it.

Need the ground to haul the manure on.

Once in a lifetime this ground will be up for sale.

They don't make any more ground.

My check book is bigger then his.


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## discbinedr (Mar 4, 2013)

You would need to clear at least $1000 bucks an acre plus the land value would need to increase at the rate of inflation for it to make any sense at all unless of course you really loved to farm.....


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## deadmoose (Oct 30, 2011)

swmnhay said:


> For some it is a place to park their cash.
> 
> The bank is not paying any interest on saveings.
> 
> ...


All valid reasons if you have LOTS of extra cash. None that will pay 
Back tho.


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