“They aren’t making any more land.”
The true comment has been repeated uncountable times throughout history.
“Land only comes up for sale once in lifetime, so purchase must be made when there is that opportunity.”
Similar statements have also frequently been quoted, but there are many exceptions. Certain land parcels have changed ownership numerous times in a few years.
“Cost of land will always be higher.”
While sometimes true, it is a misnomer verified in research of land sale prices throughout the century.
Prices paid for all types of land have skyrocketed comparatively in current times. However, a slowdown has been reported by financial institutions, with predictions for further decreases in prices.
“While land prices might continue to decline, they can’t go down to levels of 40 years ago.”
Comparable comments have often been made by the “younger” generation of agriculturalists and landowners.
It’s not said by the ones who remember earlier sharp land price deterioration. Generational family agriculture operations were forced out of business largely due to extremely high interest rates.
After record agriculture prices, producers became overly optimistic believing they would forever receive such high income.
That was far from the way it happened. Those paying record land prices found their purchase was valued at a small percentage of what they’d bought it for.
“Rich” farmers and ranchers suddenly became “poor,” from decline in net worth with little chance of continuing business.
Lending firms were in a similar struggle as the land was not valued at the amount for which loans were made.
Real estate businesses were hired to disperse the land at levels far below purchase price. It was truly a gloomy time both farmers and financiers could have never imagined.
Certain agriculture producers were able to realign operations and continue. Employment away from the farm helped keep some programs afloat at far reduced volume of peak times.
Farm wives in most cases then did not have off farm jobs but were forced to employment in town.
Never forget Dad saying land was $1 an acre in his earlier years. “Why didn’t you buy it?” naïve son questioned. “I didn’t have a dollar,” Dad replied.
Land values can deteriorate below present prices.
Reminded of Job 28:13: “Man knoweth not the price thereof; neither is it found in the land of the living.”