insane land prices

[Howboutthemdawgs]

Played golf with a couple of guys yesterday.....and talk turned to land prices, cattle prices, and home prices. (food and etc.)

1. A rancher I played with buys calves.....normally in fall and then feeds them out over the spring and summer at his ranch in Colorado. Land was located in popular ski area at about 6000 feet elevation. All needs to be irrigated to make hay for the cattle (water comes from impoundments at higher altitudes.). Asked him the land prices there....and he said he doubted you could buy land for $30,000 acre now. All big California money trying to buy up ranches. Told me he tried to buy calves....and he was having to pay almost $4 / lb (live weight) for calves. Said that he had to grow em to 900 lbs over the summer and no way he could pencil out a profit. Gonna try to sell his hay this summer and sit it out.

2. A Canadian guy was just up in western Canada trying to buy a home there. Said homes were being bought at insane prices by Chinese people.....and then renting them out. Said the prices were insane....and he could not get himself to buy a home.

3. I get "the farmer" newsletter each day. NW Iowa farmland just sold for $30,000 an acre. Two 80's were sold. Good land.....and fully tillable. Just a benchmark. Not sure anyone can make that "pay".....but most will never come to market again in your lifetime.....so....if you got manure to spread or want to grow.....that becomes your option.

4. Not much adds up.......but, I suppose folks do not want to get caught holding cash?

Seems to me that stocks would be a better haven right now......but what do I know?

Rancher a sounds like he lives outside of steamboat….

 

[Foggy47]

Rancher a sounds like he lives outside of steamboat….

I was trying to remember what he told me.....I think it was near Vail? He made money in the supermarket biz.....and said he was going to ranch until it was gone. Dunno....but it sounded like he has a pretty sizable play in a ranch. I think he normally finished about 1000 head. That takes land.

EDIT: I think he told me Aspen. I never been there.

 

[b116757]

One of my lumber customers in Colorado was speculating pretty heavily pre 08 I think he lost his ass pretty badly following that correction when liquidity dried up. This time idk it feels different there are market forces at work that are different for sure like the housing shortage we are in and the 10,000,000 illegals in three years straining our housing market and the big investment groups since 08 have begun to get into the single family home market place. I just have my doubts as to a major market correction in the near future like we saw after the 08 collapse. And beef prices are still high and likely will be for a while that drought took its toll on many beef producers and you can’t immediately increase the beef herd after thinning it to the point of drought survival over night so a lower than normal beef supply may take a while to work thru the economy.

 

[Telemark]

A Canadian guy was just up in western Canada trying to buy a home there. Said homes were being bought at insane prices by Chinese people.....and then renting them out. Said the prices were insane....and he could not get himself to buy a home.

I can couch for that. I have Canadian real estate, and the Chinese have come in with bozillions of dollars and are buying anything they can get their hands on. It's pretty much the only thing they understand from China, and as soon as they can get capital out of China they dump it in real estate wherever they can. The Canadian government has been very friendly to this for decades. It's a disaster for Canadians. Imagine you work 40 years to pay off your modest house in Toronto or Vancouver, and when you retire, you can't afford the property tax on your own home because the government let a bunch of foreigners park their cash in your local real estate market. So, you have to move out of the home you worked your whole life to pay off.

"Oh, but you must get a lot lot of money for it", people say.

"Yes, and thank god for that, because EVERYTHING costs a lot now.

Young couples cannot afford to live in many Canadian cities without renting out part of their home. Temporary residents like my family, who have been going to the same land for almost 100 years, are getting blindsided by new regulations, taxes, and penalties, because of the government's poor management of foreign real estate investment, and the ham-fisted blanket policies they enact to try to make constituents feel better.

Trudeau is an absolute crook. I hope he gets his comeuppance.

 

[Bill]

SD posted a true Meme a while back. Land and houses are not worth more. Money is worth less. The real kicker is when you sell there are capitol gains taxes on your already devalued dollar leaving you with less then what you started with "value wise."

 

[Hoytvectrix]

Canada enacted a law last year to try and curb some of these foreign investments. It was set to expire in two years but individual provinces have all been extending it.

Canada's Ban On Foreign Property Buyers: How It May Affect You

Canada's Ban On Foreign Property Buyers: How It May Affect You

www.forbes.com

A few similar laws are being worked on in the US, but for foreign-owned homes and regulating investment group ownership of homes. I'm normally not a fan of controlling who can own what, but these all seem reasonable to me.

 

[Howboutthemdawgs]

Farmland can be a proxy for hunting land. This is the reason land prices will never fall

https://who13.com/news/iowa-news/iowa-lost-over-half-a-million-acres-of-farmland-from-2017-to-2022/amp/