Rural Land Prices

By Tom Brickman on September 20, 2011

Rural Land Markets – What Are Prices Doing?

An Interview with Tom Brickman, September 29, 2009

Q: What are you seeing in the rural land markets right now?

A: We are moving some properties but it is slower than normal. The ones we’re selling are modestly priced – at the low end of what we called ‘reasonable’ last year. It’s definitely a different market than 8 to 12 months ago.

Q: Why do you think it’s slower?

A: From my perspective, the main factor affecting the rural land business is uncertainty from many points of view – interest rates, taxes, employment, expanding role of federal government. Buyers and sellers are both ‘sitting on their hands’ waiting for someone to ‘blink’.  Sellers looking backwards at the tremendous run-up in prices over the past 8 years and unwilling to budge off those peaks . . . buyers looking forward at pervasive uncertainty and unwilling to pretend things haven’t changed.  So transaction levels are declining – the ‘gears are locked up’.

Q: What will cause the ‘gears to unlock’?

A: Historically it is sellers that ‘blink’ because they are more subject to ‘external’ pressures than are buyers . . . education, health care needs, housing cost, decline in standard of living, etc. Unlike sellers, buyers are seldom ‘forced’ into a decision.  The longer this perception of uncertainty continues, the more likely it is the vagaries of life will catch up with sellers. More and more Sellers will be pressed into making a sell decision and prices will decline.

Q: So, you see the possibility of a price decline. How much?

A: Well, I think we’re already seeing declines. The only other time in my 34 year career I’ve seen land decline was just after the Carter years . . . the early 1980’s.  We saw land prices fall then, but, not too far, perhaps 15-20%, and not for too long – a couple of years.  If the uncertainty continues I expect to see something modest like this again.  But, as a land owner and land broker, I am optimistic!  Land is such a great, safe place to put money long-term – it really resist downward movement.  Buyers know this and my bet is they will re-enter the market to do their part to ‘unlock the gears’. It’s getting to be a good time to be a buyer.

Leave a Reply

Your email address will not be published. Required fields are marked *

Featured Blog Posts

Conservation Easements – the good and the bad

By Tom Brickman on October 8, 2021

Conservation easements are a tool landowners can use to raise…
Read More

How Not To Sell Timber

By Tom Brickman on July 12, 2018

Decisions of how and when to sell timber are difficult…
Read More