What’s Up With Land Prices?

In Upstate, SC land prices are still up…and will probably stay there.

There appears to be little impetus driving sellers to reduce prices despite weak demand for certain types of land. To the contrary unstable stock prices will drive land values higher as investors become convinced that land offers more security.

Why are land sellers holding their ground while house sellers sink?

Much has to do with the underlying mortgage…or lack of one. Hardly any of our current land listings are mortgaged. On the other hand, the entire housing meltdown is attributable to bad lending practices and mortgage pressure on homeowners.

Even mortgaged land differs substantially. Banks have always been conservative when it comes to land loans with 60% to 75% loan to value being the norm. Without political pressure on lenders to make everyone a landowner, credit qualifications were valid and borrowers actually paid a down payment along with closing costs. In short, most of the people financing land are monetarily committed to the deal. Read more »

Vacant Land and Baby Boomers

Are you aware in the midst of a slumping housing market that land in many places is appreciating in value? So why aren’t more investors pursuing land as a part of their investment strategy? The answer is that most investors are focused on the over-developed residential and commercial real estate markets and haven’t considered raw land as a viable option in which to build their real estate career.

Land is the place to be in 2008 and 2009

According to the USDA, there are 2.2 billion acres (yes, that’s billion with a big B!) in the United States. Of the total amount of land, 1.6 billion acres can be bought and sold. Some of you are thinking, “So what – are people really purchasing land, especially when prices for houses in many places are falling?” The answer is a resounding, YES! Read more »

Obama and McCain on real estate and rural issues

Since I write a weekly column on country real estate, I decided to visit the websites of Senators Barack Obama (www.barackobama.com) and John McCain (www.johnmccain.com) to learn what they thought about my special interest.

Candidate issue positions are not promissory notes. They’re more like inclinations, subject to whatever. Still, they suggest the direction in which a candidate prefers to fall.

First, however, I looked into what property each candidate owns.

Senator McCain, in a sense, “owns” the most real estate, which fell in his lap because he married a beer distributor’s daughter who took over the business and has money to invest. Mrs. McCain or her trusts own their real estate, which includes at least seven properties. Mrs. McCain bought three Phoenix condos and two in San Diego for $11 million over the last four years.

Newsweek recently disclosed that Mrs. McCain failed to pay property taxes for four years on her La Jolla, Calif., condo where an elderly aunt lives. The back taxes were paid last week. This seems to be nothing more than a failure to receive the bill. Read more »

Sooner or later, we will change

Sooner or later — words I use a lot — gasoline in America will cost $8 per gallon. Which is what it costs today in Europe.

“Sooner or later” lends me a little erudition, which I don’t deserve, because whatever follows usually comes true. Not always, but often enough.

Eight-dollar gas is likely to happen, because the world’s population is growing and most of us will use more energy than before. The wealthier we are, the more energy — particularly, petroleum products — we consume. Countries that were low-petroleum consumers on a per-capita basis in the past — India, China, Saudi Arabia and others — are increasing their use.

At the same time, oil production is not keeping pace. Despite a 57 percent increase in price last year, the world’s 15 largest oil exporters — who make up about 45 percent of all supply — shipped 2.5 percent less, according to the U.S. Department of Energy.

When price goes up, supply is supposed to go up. So why isn’t oil supply going up? Read more »

Rural Real Estate Trends and Directions - Nine Predictions

1.  Prices of almost all types of rural real estate will rise steadily in the foreseeable future.  Rates of appreciation will vary, according to where the property is and what type of property it is. Appreciation rates will beat inflation and have less volatility than stocks.  Four or five percent annual appreciation is a reasonable—and modest—forecast.

2.  Impacts, both real and imagined, of global warming will encourage relocation from the coasts inland, particularly away from the Southeast U.S. and Gulf Coasts.  Upper middle south and mountains will benefit,particularly non-coal-mining areas of Tennessee and Kentucky.  Rural areas of colder states will benefit; hotter, drier states will become less attractive. Read more »

Rural subprime borrowers are hit, but most rural property is not

Here’s the story in most American cities—existing-home sales are down, pending home sales down, new home sales down and average home prices down.

Adjustable interest rates are up, delinquent mortgages up, foreclosures up.

The loans that are the source of this mess were made by big banks and mortgage companies to individuals who barely qualified for them on terms that do-si-doed with disaster.

As long as the loan originators could flip them to large investors, their high risks were shipped upstream to yield-focused folks who forgot that all the little people downstream were paddling for their lives to keep everyone afloat.

The situation in rural America is both the same and…different.

Where big lenders operated, subprime loans were made—resulting in the same pattern of delinquencies and defaults on high-interest loans to border-line borrowers. Read more »

Seven reasons to buy country property in 2008

January is America’s month of endless football cliches.

“Coach, how are you going to win the Super Bowl?”

“Well, first, our front four has to beat theirs in the trenches. Then we have to throw the ball and run it too. Our special teams have to do a few things. And we have to make some plays. Finally, we have to hope that their safeties get penalized for taunting after interfering with our too-wide receivers, none of whom can do 40 yards in less than three or four minutes.”

Those of us who have been watching pro football since the days of Jim Brown know that there is only one way to win every football game: score more points than the other team.

Making a sensible real-estate investment is often summarized in this equally simple rule: buy low, sell high. Read more »