Rural Land Investments On The Rise

By Tom Brickman on October 5, 2012

The 10/4/2012 edition of Market Watch (published by The Wall Street Journal) reports that land investments are on the rise.

Commenting on the Fall 2012 issue of the magazine The Land Report, it notes  that the top 100 largest landowners have increased their ownership by 18.6% in the last 5 years.

Why?  The Land Report says:

“In the aftermath of the Great Recession, land and land-based assets have propelled our economy out of the doldrums. Look at farmland prices. Look at energy assets. Look at the rise in minerals and commodity prices. Each of these elements is tied to the land, which is why so many savvy investors are anchoring their portfolios with this asset.”

If you are considering an investment in rural Alabama land, now is time to act.  Prices are down considerably over the past 4 years, unlike mid-west farm land.  At Cyprus Partners, we see Central Alabama land that brought $2000/acre in 2008 sell for $1400/acre today.

Some investors tell me they are afraid there is more decline left in the market.  Well, perhaps.  But there are abundant signs to the contrary:

Stock Twits reports that lumber prices are up 27% in 2012. The point is, if this continues, it will eventually translate into increases in standing timber  prices (and consequently timber land deal prices).

Forest2Market reports that in the last 12 months new housing starts are up 16% and median prices for existing homes are up 9.5%. Existing home “for-sale” inventories are down from 6 months to 4 months.  The point is, people with money are beginning to act.

Many people have lost money trying to “time” the market.  My point is, now is a good time to take a look at the rural land market and see what you think!

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