2015 rec land prices

[Freeborn]

Energy ??????????

From what I see energy will continue to trend down. Keep in mind the energy sector has not had an earnings release with these prices yet and 4th quarter earnings won’t be released until 2015.

Allot of speculation on what the present value of future energy company earnings will be.

If you step back and look at the energy producing countries you have a group of one product economies who are desperate to keep power and need the money. Russia and the OPEC countries are quickly going into a price war and they are not done yet. Where prices settle is a guess but desperate people who want to hold onto power will do desperate things.
Lots of risk and in my opinion you have not seen the lows in energy yet.

Land values, like was already said, you need to buy at the right price and right time in the cycle or you can lose big. Like investments it doesn’t need to be a perfect decision but one that is definitely to your benefit.

 

[shawnv]

It will be interesting to see what happens in my area, inventory is low.

 

[Jim Timber]

Jerry's right. The Saudi's and Russian's are monkeying with supply trying to make the fracking and pipeline's cost prohibitive. The US is producing more crude than ever, and it's cutting into the Eastern profits. So the obvious solution is to flood the market to remove the incentive to compete, at which point they can throttle back production and let demand raise prices again.

Jim Kramer had a real interesting insight on this the other day - he said the oil sands have a break even point about 60% lower than importing foreign crude. If that's true, we can keep going like Walmart until the neighbor is dead and gone even if they're the one's trying to break us. The technology is evolving and the US deposits are becoming easier to refine. We don't need the East as much as they need us. China's position in all of this is hard to account for as well. If they're in as rough of shape as some analysts believe, they could implode rather than rise to overtake our economy. With how much the commies manipulate media, it's hard to say how bad things are over there - but everyone's noticed they aren't growing like they were a couple years ago, and our recession is hitting them hard.

Fun times! :D

As for land - if it's a parcel you want, at a price you can accept and be happy with: it's a good buy. If you're buying it for profit, recreational land isn't where the money is. You'd do better flipping houses.

 

[Freeborn]

I sat at a seed and chemical meeting yesterday with a farmer/seed salesman, that bought 320 acres by clear lake IA for just over $11,000 an acre. He said his banker and him figured corn would always be at $6 or more and it could cash flow.:eek:

Who needs enemies when you have bankers like that? One thing to keep in mind is everyone has there own self interest in mind and if your banker pushes something that seems unrealistic you have to wonder why?

 

[foggy]

^ Funny you should say this Jim. I always felt, that until I was nearly 60, I never has excess capitol to put into my own hunting land.....and really didn't have the time to manage it for this purpose either. So.....I kept my assets in things that provided more opportunity and income than bare land. Not saying a person should not own non-income producing stuff.....just saying their are better avenues to growth and profit than wood-land that does not provide any significant income. Farms are a bit different.

This being said....owning some hunting land is quite satisfying to lots of us. :)

 

[Jim Timber]

I didn't say not to buy it Tom, I said there were better ways to make money in real estate. ;)

As MBC has said over and over, you can buy land for profit all the time, but it's usually working farm land (or not working for the owner as the case is now). I'm sure I could sell my woods for $3K an acre and have a contract by Monday - because of local demand. I'd see 50% ROI profit in 4 years. However, I bought my land to use and enjoy, so it's effectively worthless until I'm ready to part with it from an appreciation standpoint. I have to sell to see any gains, and while it's not ultimate buck trophy land, I'm very attached to it.

 

[bat man]

I'm sure I could sell my woods for $3K an acre and have a contract by Monday - because of local demand. I'd see 50% ROI profit in 4 years. .

Where are these MN woods that you can get $3k and acre for?

 

[Jim Timber]

The neighbors were waiting 20+ years for my property to become available. I bought it via an email offer to Potlatch's realtor, it was never listed on the market. I have two of them who've approached my FIL about rights of first refusal thinking he had some kind of say in the matter (he doesn't - it's 100% mine). Location, location, location: I have semi-wealthy neighbors with too much disposable income and they want hunting land on our block.

The cabin's been in my wife's family since '72 and she's spent nearly every weekend there of every summer of her life. My land is across the street from that cabin. I wouldn't sell it for 4K/acre. It's not a flip, it's where I'll grow old and die.

 

[foggy]

When I bought my Potlatch property.....I made an offer to their real estate agent (before it was publicly listed). The agent had to call the surrounding land-owners and give them fist right to buy the land (I think 24 hours). None of them bit.....and I bought the land.

Not sure they always do this.....but I was told that was the case. If you want to see some land values for this timberland in the area.... www.landradar.com is this areas Potlatch real estate agent. They have a few others in different areas of the state.

(I would imagine that) there are some parcels they sell that never see the "open market". Adjoining landowners buy it.

If you are serious about buying land in this area.....you need to be talking to the agent so that you get early looks at new properties that may be coming onto the market!

 

[foggy]

The neighbors were waiting 20+ years for my property to become available. I bought it via an email offer to Potlatch's realtor, it was never listed on the market. I have two of them who've approached my FIL about rights of first refusal thinking he had some kind of say in the matter (he doesn't - it's 100% mine). Location, location, location: I have semi-wealthy neighbors with too much disposable income and they want hunting land on our block.

The cabin's been in my wife's family since '72 and she's spent nearly every weekend there of every summer of her life. My land is across the street from that cabin. I wouldn't sell it for 4K/acre. It's not a flip, it's where I'll grow old and die.

^ This is one of the problems with hunting land values in the Lakes Area. The values are likely 1.5 to 3 times what you may pay about 30 miles away. If I go west about 30 miles the property value is 1/2 or less of that which I own. As always....there are exceptions. I really like having the close proximity of my land to my home.....so I paid a bit more than I would have out to the west. I don't plan to sell, and may add some land if the price is right. But I am not into paying a premium for this dirt.....and buyers at the high price are laying low these days (which is different from ten years ago).

 

[Jim Timber]

Potlatch gives right of first refusal to the leasees - in my case the property was available to be sniped until I returned the signed purchase agreement and earnest money. None of my other neighbors were contacted, but they were all relieved that I wasn't one of the previous occupants when I introduced myself.

Foggy's on the prime side of the county, and I'm in the "low rent" district. 1ksf cabins on a 50x150' lot are still selling for $220k on our lake. 10 acre pine planted hay fields are selling for 3k/acre the next block over - and they have no character.

 

[Jim Timber]

Meanwhile.... I'm wanting more land here, not less. ;)

 

[kl9]

Man, if I could section off two 20 acre parcels and sell them for $3K an acre....I'd probably be all over that like stink on shiite

Ya but then you introduce the possibility of a firing range come opening morning

 

[Jim Timber]

You think it'd get better if I added 2 more land owners in the middle of the block?

We have hoss bucks here, but that's beside the point really. Deer hunting isn't my life. Big antlers don't define my hunting satisfaction. I had wonderful venison polish sausage for lunch today - the last package of last years 70# button buck. Mmmmmm! Can't eat antlers.

There were 7 deer in the neighbor's field on Wed when I went home (digging up crop spillage).

My deer hunting is going to improve, but deer aren't why I love my land. You guys treat property like trading cards. You swap one parcel for another hoping it will "produce" that magic record breaker. I don't.

 

[sandbur]

foggy and Jima re right about the Brainerd Lakes area. Things are different even at 10 miles from the lakes.

I'm sitting on some land and trying to decide when to sell. The ideal time would be when I can no longer work, but want to delay SS for a year or two. I have not quite figured it out. My land is the land behind those tiny lots that Jim speaks of. Places for a bigger house or a toy shed.

 

[foggy]

foggy and Jima re right about the Brainerd Lakes area. Things are different even at 10 miles from the lakes.

I'm sitting on some land and trying to decide when to sell. The ideal time would be when I can no longer work, but want to delay SS for a year or two. I have not quite figured it out. My land is the land behind those tiny lots that Jim speaks of. Places for a bigger house or a toy shed.

Art. Those small parcels you own, near the lake, do you absolutely no good. Only cost you tax money and make for headaches....no? I think if you can get paid the right price you should sell them and invest the money somewhere else. Your getting encroached from every angle......and that is not likely to stop. Those folks at the water need storage space.....sell it to them. (my two cents) :)

 

[sandbur]

Just a few complicating factors which I will explain to you at some point.

 

[Jim Timber]

Ya...but that really doesn't matter here in the deer desert.
$120K buys plenty of vaca time in pleasant, sunny locations.

If I sold half my land at $3k an acre, after capital gains tax I'd profit less than I make a year right now (which is probably technically poverty level). It's extremely short sighted thinking in my view.

In 2008/9 2c (managed forest) was selling for $3850/acre in the two townships I'm in. I got in at $2k and it went down the next year. Now we're back up and climbing.

Maybe my tolerance of winter will change in 26 years (when I hit 65), but they still won't make more lakes 8 miles from town, and we could be sitting on gold by then.

In the mean time, I love my chunk of dirt. It's like a bond - hasn't matured enough to cash out.