A lot of youngsters around here have two good years under their belts, and zero really bad years. For whatever reason, daddy has been writing checks for them. Borrowing money for them. What happens when you can't make payments? Anyone know? lol. At these prices, and if you had no payments it is tough enough to make a living.One young BTO who has been renting a big chunk of his operation has called Ritchie Brothers and the story goes he didn't like their guarantee . Values cannot be sustained with the current market situation . Once you start loosing renters and others sharpen their pencils a little more what do you think will happen ?
Farm Credit Canada does finance at 25% down, pretty sure most banks/credit unions do as well.Uthinkyourwet, can you finance with only 25% down? Banks here are wanting 65% down, they see a big down turn in prices coming. What land is selling is being paid for without financing and being compared to savings interest at less than 1%.
I think that is a very valid point. i was thinking that also, if a had a Few million dollars where would you park it. There a lot of wealthy people who have cash to spare, and land would be a place to hold it. Especially the people who got burned in the 2008 crash, and saw a huge chunk of the saving in the bank evaporate. I was watch a interview with a stock annalist (can't remember the channel) and they were all about agriculture is the place to be, so i can see a lot of heads turning to the land scenario for a safe haven, even if they lose a little. some is better then none.I be been thinking about this lately. I had a neighbor try to buy a farm that I was renting out from underneath me. My ego wouldn't let him do that to me, so I bought a farm that will never pay for itself in my lifetime. The price was 2.5x the last farm I bought 5 years ago. A farm not far from me sold for over 10000 per acre last year! It got me thinking about the disconnect between farm land and the farm economy. I think that a lot of the price run is caused by low interest rates, and fear of inflation. We have always had insurance companies come in and buy land, but now in our area, it's teachers unions. I know of 3 large farms purchased by teachers unions from Alaska, Arkansas, and New York. A post above mentioned a Chinese investor, and I know of a farmer here with Chinese money. If you have money you cannot put it in a bank cd and make more than inflation eats. In fact you are losing value. The stock market is not based on any fact anymore, so it's not a safe investment. I believe that this is causing the disconnect. Farmers that are buying land already have money, and are buying for investment rather than to make a living off of it. This is all irrigated farm land.
Is this unique to Idaho? Or is anybody else seeing this?
I have places I park the very limited money I have. But seriously, why would I tell people? Do some digging, funds and investments are everywhere.Where do I get a 8% ROI, I can borrow money for 3.5% so you got my attention.