Rates are crashing and fuel to the moon!

It's economics plain and simple. Been trending this way to where we're at for 20 years or longer. When people who live in modest cookie cutter homes on a postage stamp lot on the west coast or northeast sell those homes for $500,000-$1,000,000 and move with their windfall to other areas of the country and purchase 10-15 acres and a home 3x what they had without all the taxes, crime, congestion etc the result is what we have now. Places that were affordable suddenly aren't. That's exactly what's happened where I'm at.

 

It doesn’t have to be done in one fell swoop one way or the other. Around home it’s common for a ranch employee to start building their herd renting grass in the summer and running them with their boss’s cattle over winter and during calving. Having that type of access to land allows them to hold back more heifers because they don’t need so much cash. They can also trade their labor for hay, etc. As they are building their herd size the owner is also downsizing, stretching the process out over multiple years instead of taking a huge tax hit from selling every cow at once.

Once the time comes the employee has a herd large enough to use as collateral on the deeded land and any long standing rent agreements on grass carry over to the new owner. With a decent herd and some land they can also get low interest first time farmer loans from the government to purchase equipment and often times will buy the tractors and such from the rancher they’ve worked for. The rancher is happy because the land goes to someone who will continue to use it for more than just hunting and the kids are happy because they’ll get their inheritance money.

Crop ground is a different beast. That tends to get bought by people who are farming with money and not farming for money.

 

That’s exactly what I see around here. Long time ranchers will work with either long term employees or kids to work themselves out of the business over time. I have a neighbor a little over a mile up the road that’s still running over 500 mamma cows at 83, because his only daughter can’t be trusted with the property. He’d do just about anything to keep it as a working ranch.

 

I’ll stipulate that the current prices are the results of demand and supply.

The economic issue, however, is that as prices go UP, supply goes UP. Economically, it doesn’t matter who owns the house, if it’s rented or owner occupied. Rentals and ownership is pretty interchangeable.

So, prices have doubled, tripled, quadrupled. What can possibly be the economic reasons for that? Sure, inputs have gone up with inflation, wages are up, materials are up. But not fourfold, threefold, nor even double. Sure, square footage has increased, but not fourfold, nor three fold, nor double. Price per square foot HAS.

There’s no land shortage. Unless you’re trying to build a duplex, then good luck to ya. And you better put sprinklers in, and wire it for an electric car charger, and, and, and.

the reason for the lack of supply is political, not economic.

 

There's plenty of land out there but not every piece of property out there is or will be for sale. Good land is hard to come by and when it does go on the market it commands a premium. Even marginal land does. There's a property going up for auction soon near me now that's in a frikken flood zone but surveyed up in a bunch of lots for housing. I dunno how they get away with that or even look themselves in the mirror. Most of our inflation problem stems from all the easy spending and free money from the scamdemic. Dollar hasn't been pegged to gold for 50 some years now. This is what happens with paper money not backed by something tangible.

 

In the last 10 years we've only built about 12 million new homes. Take away all the homes destroyed by the wild fires and hurricanes, factor in the homes being left vacant for tax reasons and I doubt real housing supply has gone up by more than 5%.

In the same time frame, the population has gone up by more than 30 million. Supply hasn't kept up with the increased demand.

 

Wasn’t it FDR that took us off the gold standard? Like 80 years ago

 

Those 10-20 million illegals sure made a dent in those homes. Supply demand all day long cause prices to raise.

 

I can still buy dry ground around the farm for under $4K per acre. If you were allowed to build three lots to the acre...... ? But houses are $350K MINIMUM. It's not the land cost.

 

Must not be usable? 100+ acre pasture for sale near me for 1.4 million. People actually been looking at it. No way it would pay off farming it. Would have to be turned into a subdivision and the county has already said no so i guess its just rich folk looking at it for a hobby farm.