“They won’t make any more land.”
That’s a frequent comment during conversations about land values. It is true. However, emphasis of the statement is generally to encourage one to think, because of that fact, it doesn’t matter how much is paid for land.
“Land values will never go down.” There’s another emphatic remark that has been made frequently in years gone by. It is a falsehood, plain and simple. Those who said that have been proven wrong time and time again.
An example is in past weeks when tracts have sold at reduced prices from a year ago. Better illustration is the difficult economic times of the early ’80s, when in certain
locales there was seemingly no value attached to agricultural real estate.
Prices at that point were frequently lowered 50 percent, and probably much more in certain instances we’re not aware of, and there were no takers. It seemed “cheap,” compared to just months earlier, when there seemed no end to increasing values.
“Oh, it’ll always be worth this. It’ll keep going higher, just watch it.” Those combined sentences have been quoted as well, and they too have repeatedly been proven wrong. Now, our hindsight isn’t as far as others much more in the know, but we’ll never forget when we were begging for a place to keep our first horse in 1962.
All we needed was a pen, really, and our folks finally got two acres within the city limits. It cost $700, which had to be a record price, but it was due to the location with several farm structures. Actually, they were paying city lot values. To us, it was a ranch. One would have thought we owned the whole state. Besides, we could have a horse.
Not only was a city kid who wanted to be a cowboy thrilled, but looking back, it had to be a real milestone for our parents as well. They owned two houses and a store in town, but they’d never owned a farm. Though farmers at heart they always were, unpreventable circumstances long before we arrived forced them to become city dwellers.
Horse inventory outgrew that miniature ranch in a few years, so Dad and Mom looked for more land and found a “40,” just two miles north up the country road. Again, what must have been a record for the times, they paid $100 an acre for those Flint Hills.
While the two land purchases in our early years seemed like a lot to us, they must have seemed like a fortune to our parents. We’ll never forget Dad telling us land was $5 an acre in the ’30s, and we couldn’t understand why he didn’t buy up the whole countryside. It was simple to him: “I didn’t have $5, let alone more than that.”
It’s highly unlikely that agricultural real estate will deteriorate to that level. But, even if God doesn’t make any more, land can certainly go down drastically from what it has been at peak points. Looking back at history could give an insight to value percentage of the amount, if not much more. We’re no economist, but we are a realist.
Actually, the best analysis is given in Job 28:13: “Man does not know its value. Nor is it found in the land of the living.” Likewise, one should not forget the threat in Leviticus 27:18: “Its assessed value is reduced each year.”