Buying Land

Light at the end of the tunnel – no longer the train!

Light at the end of the tunnel - no longer the train!

Whether you are a land buyer, seller, or broker, you’ve probably noticed the many recent references in the news to the word “uncertainty”.  That word, it seems, applies to the economy, availability of jobs, land prices, government, the stock market, politics, interest rates, and pay increases.

Without a doubt, uncertainty translates to hesitation, inactivity, fear, frugality, lack of confidence, and downright procrastination.  Our country is built squarely on confidence.  Just think, every time someone writes a check, the payee assumes that the check will clear the bank.  Store clerks take a piece of plastic with your name on it, assuming that their bank account will be credited with your payment.  Borrow money from the bank and they give you cold, hard cash – yet all they have is your signature.  As long as we continue to have confidence, our economy flourishes, jobs are created, money is spent, profits are made, the stock market rises, etc.

Yet, inject uncertainty into our lives and everything comes to a screeching halt.  After all, you can’t be too careful.  Who knows what will happen next?  Pretty soon, fear of the unknown takes hold – and everything slows down.

This year’s election, just decided in recent days, removes a great deal of the uncertainty – regardless of which side of the issues you are on.  The direction of the country can be more accurately predicted.  The dreaded “unknown” now becomes known.  Now, we can settle down, begin making plans again, and move towards achieving our goals – whether that be buying or selling land.

Over the past 40 years (and 3-4 recessions) in the land business, this author has noticed a very predictable trend.  The purchase and sale of land usually begins to slow down about 6-12 months before a recession begins.  Even as the recession falls into place, prices continue to rise, as they had for up to two years before the recession loomed on the horizon.

During the recession, prices tend to remain at their highest level – up to a point – usually ending about 6-12 months before the recession begins to wane.  At that point, some land sellers begin to feel the pinch and begin lowering their asking prices somewhat – thinking that the reduction will catch the eye of a serious buyer.  Unknown to those sellers however is the land buyers’ perception of what’s happening.

Land buyers, still feeling the pressures of the painful contraction of the economy, are the last ones to know it’s over.  Even as company profits begin to turn positive, with interest rates at their lowest point in years, the stock market perking up, and land prices beginning to tumble even further, the buyers must feel and experience a positive change before their confidence returns enough to go ahead with their land buying plans.

Finally, in summary, prices have generally hit bottom – their lowest point in several years – about 6-12 months after the recession is over.  The light at the end of the tunnel for buyers is now in view – and it’s no longer the train.  It’s the clear blue light of a new day.

For land buyers, the next 6-12 months presents one of the greatest periods in recent history to benefit not only from the largest selection of available properties – but also the lowest prices and interest rates.

This IS the “woulda, shoulda, coulda” time to buy land!

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About the author

Paul Christian Breden

Paul Christian Breden is a practicing North Carolina & Virginia land broker with 40+ years experience. His company, Mountain Land Company, sells only raw mountain land over 50 acres in 10 counties in the Blue Ridge Mountains. Paul has authored scores of magazine articles and hundreds of newspaper columns on buying and selling real estate, including “Carolina Dreaming – Finding and Buying Mountain Land!” – a practical guidebook for land buyers.

4 Comments

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  • We echo your analysis. “Confidence, uncertainty and light at the end of the tunnel” are the exact words we’ve been using to describe the market. It’s an exciting time for those with enough confidence to acquire the land they’ve always wanted.

  • Thanks for the ‘been-through-several-recessions’ take on the market Paul….

    While we’re still stuck in the pit of the low prices and lack of demand, one strategy we’re that’s working in NH for single lots, is marketing a ‘to-be-built’ first time home buyer house on the subject lot, at a price that is at, or below the magic level for these buyers, for whichever town it’s in. Obviously the lot price has to fit in the numbers, so this only works with the cheaper lots. Lots by themselves aren’t moving, but cheap homes still are and we can get the buyers financed with FHA or USDA for low down etc….

    Regards,

    Richard 🙂

    Investor, 13% interest on your capital, TAX-FREE.

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