The Price vs Value of Farm Land

Some know the price of everything and the value of nothing. The farmers buying land know the value of an adjacent farm, and as to price, may say "damn the torpedoes and full speed ahead."
Where else can they park their cash that will do any good.

My unscientific research to date shows that some banks are lending only $4000 per acre on land around Adams County that may be selling for more than twice that much, so this is not a credit bubble. I have posted the Article below on Facebook using the Wall Street Journal's own link and have cut and pasted it here.

"A Bubble Down on the Farm? online.wsj.com
The big question mark hanging over the farm economy is whether a bubble is building in Midwest cropland. Prices have doubled over the past five years in states such as Nebraska and Indiana."...WSJ (I accessed the entire article via Google News. This link asked me to subscribe to WSJ.)

Unlike gold, land offers a return. I don't yet know if the ethanol market for corn out-weighs the increase in world population, or if one would substitute for the other should one collapse, but I don't see either going away any time soon. If weather patterns remain eratic, so will world food production, so edible crop prices should/could remain strong. If land for sale remains at the 1-2% of the total as suggested in the article, scarcity could hold up land prices as long as the neighbors have cash that needs a safe haven and no better alternatives are available. On the other hand, land futures are not traded on the stock market, so in the big city who really cares? There it is the commodity prices that matter.

The farm land market may be driven only by people who know the VALUE of something and don't care about price. That is the opposite of the Las Vegas bubble. Perhaps those who don't know the value of things should be afraid ... very afraid. It is almost 2012.

Seriously, I do wonder if the so-called "business cycles" that we came to know and love in the 20th century might be twisting like a strand of DNA.

I don't claim to know what will happen, but when the issue is mentioned on Google News, people are beginning to pay attention. Stay tuned.

Hedge Post Foundation

I am a new member of the Western Illinois Sustainable Agriculture Society and I recommend the purposes of the group, and others like it, to everyone who eats. If you have been wanting to grow food, but need land, call me. If you have an odd 5 acres that someone could grow something tasty on, call me. I would be happy to help you find the missing party. My purpose is just to help us grow a wider diversity of food and bring unused land back into production. I'm thinking lease or crop-share, etc. I am also interested in green construction and implementing renewable energy. For instance, the pond in the photo is fed by a spring and it serves as farm irrigation in dry weather. It could raise fish, cool a house, and create electricity all at the same time. When I get something more happening with it, I will post the photo's here. I plan to undertake these activities under a organization that may be called the Hedge Post Foundation, LLC. Eat well and prosper. GH

Photo of New Listing & our New Blog Address

Our Blog Address has changed to 217House.blogspot.com. "217" being the area code for Illinois.




The newest Rodemich and Sons listing at 3125 Rutledge Place, Quincy, Illinois, is listed $92,500. It is 1080 sq ft, was built in 1950, and is in a convenient location, great neighborhood near excellent schools.

In fact, in Quincy, most neighborhoods are pretty nice.
Best wishes,
Grant

My Buyers Just Bought This House ... already!

The ink isn't dry on my license yet and, with the help of Kent, my sponsoring broker, we have a house in escrow!
My buyers liked this one (see photo) near Adams and South 15th and plan to transform it.  We will post the "after" photo's here and I am sure the neighbors will be pleased. List price was $35,000 for 908 sq ft with full basement and a big lot in a nice neighborhood. That's $38/sq ft ... at list price.  I can't tell you what the sale price is until we close. If you were thinking about a Las Vegas investment, Quincy is better - call me.  We might not find another this low, but we might come close.

We also have a new listing at Rodemich - Photo to follow.  It is ready to rent if that suits you, at 3125 Rutledge place - 3 bed room ranch, 1080 sq ft, neat as a pin. Could rent between $700 and $1000.  Listed at $92,500 that puts a 10% ROI within reach.  2010 real estate taxes were $1632.44.  Email me with any questions.

So, put Quincy on your radar.  Low prices.  Good returns.  Low crime. Great quality of life.  I will add some links to this blog to aid your research as the days go by.  And, I hope to find some farm land to list and find some folks who want to buy.  They tell me food remains in demand worldwide.

In the meantime, good hunting!

We're Going Up The Country

The House Team is moving from bright neon to bright stars, from big Casinos to big weather,

from wide open desert to wide open farm land, and from big city to big country. We are going back to western Illinois to the place where we grew up and we are ready for the change. Our roots are deep in Adams County. We'll be the sixth generation to live on the home place and our kids will be the seventh. Even Bugsie Segal's kids can't say that about Vegas, and he invented the place.

We have had a great experience in Las Vegas and have thoroughly learned the real estate trade. As grandad said, don't learn the tricks of the trade, learn the trade, and we did. We also served hundreds of wonderful people who became our clients and friends over the past decade and who sent us their repeat business and referrals. We protected our clients from the wolves-in-sheep's-clothing, the sharks and barracudas that also inhabit Las Vegas in numbers way above normal. We built a team of house stagers, lenders, home inspectors, and fellow Realtors that served in an ethical, proactive fashion the needs of our clients. We have routinely been in the top 10% of each brokerage where we worked, including Century 21 Aadvantage Gold's Green Valley office when it was the top selling C21 office in the world for two consecutive years (and by chance my office manager there, Sandy Ford, was from Seehorn. You have to be from "back home" to know where that is.) And we never forgot the ethics learned practicing Law in Adams County years ago.

That is the experience we have earned and that we plan to deliver to new clients in Western Illinois once I pass the Illinois Real Estate License Exam and become licensed there later this fall, if all goes well.

And, if you have ever worried that a condo in a lifeless desert may not be the best hedge against what lies ahead, consider, not just a home in the country, but an investment in Illinois tillable land. Land prices have been rising along with cash rents. Land can't burn down, blow away or succumb to vandals. Population is increasing on this planet, everybody has to eat worldwide, and, they aren't making any more land. Think gloablly. Act locally ... Call me.

Home Inspections - More Important than Ever

There are two major sellers in Las Vegas. Banks and flippers. Both are loathe to give the buyer a Sellers Real Property Disclosure. Both usually require a notarized waiver of that form along with all buyer rights under Nevada Revised Statutes (NRS) 113. Nor do they know or care about utility costs, so the Nevada Energy Form must usually be waived as well. Also, in preparing the home to sell, they tend to literally paper, paint and caulk over structural problems and code violations that might bite the buyer later on. This makes your home inspector a very important part of the team.

I mention this because, in the ten deals I have closed or have ready to close so far in 2011, three buyers previously passed on houses that we had gotten into contract because major problems with the house were subsequently discovered by our home inspectors. That is 30% and that is a substantial number.

One house involved a poor roof design that left unvented chambers under the roof. These held moisture even in Las Vegas' low humidity and had caused the roof to sag and leak.
The other two involved unpermitted shoddy construction that could later create problems with a city government looking for fees wherever it can find them. Both of these also included water damage because the construction code had not been followed. We passed on the houses but somebody out there bought them!

Stay alert ... and good hunting.

Blood in the Bellagio Fountains ...so to speak

Now that's a visual image of Las Vegas real estate with blood in the water!
In the Las Vegas valley, the new construction homes being sold are smaller and cost less, Buck Wargo of the Las Vegas Sun has just reported. “The price per square foot (new construction - gh) fell to a new low of $91.17, which is 12.4 percent below the $104.05 square foot price in April 2010,” he says. 313 permits were issued in April, “34 percent fewer than April 2010. For the year, 1,141 permits have been issued, which puts the region on track to fall below the 3,776 issued in 2010.”
Read Buck Wargo’s entire article at http://www.vegasinc.com/news/2011/may/16/las-vegas-existing-home-sales-brisk-prices-continu/ (used with permission). It has some great data that MLS doesn’t capture.
Bottom line, Mr. Wargo concludes prices have fallen by about 14% since this time a year ago, MLS listings fell by 9% between March and April this year, and the median price of resale homes is currently about $107,000 and $70 and change/sq ft. The double dip we feared seems to have occurred. Question is, has it stopped dipping?
Emails from new home builders continue to tout very high realtor commissions – 6% at some builders recently. As I have mentioned before, when the market is strong, some builders almost quit paying commissions because they feel they don’t need the Realtors. But lately, as they did back when the crash unfolded, they are offering the moon.
On the street, some lenders don’t want to lend. I have had a recent transaction with conventional loan, fall out because, weeks into the work, and after losing the first house to problems discovered by our home inspector (as he should) and after the second house in contract had passed inspection, the lender cut the amount they had promised to lend and destroyed the deal, thank you. They handed us the ball, let us run with it, and then tackled us. At least I didn’t pick’em. Nationwide may be on your side, but the banking industry is a separate question.
If you need an ethical lender, I can recommend someone.
So, prices are very low, and could still go lower. Sales volume is huge. Listings are down, and if you exclude short sales as I recommend, inventory is tight! Over half of LV offers are cash. If you are not aggressive with your highest and best offer, don’t bother. This is Vegas. The world is shopping here right now. If you hedge on your offer with sale numbers so high, somebody else with cash probably wants it more than you. The fountains dance about every 20 minutes.
Good hunting.