By Lance Winslow
Most everyone believes that real estate is dead, but is it really - not everywhere say analysts - after all there is a need for raw land, especially for farming and agricultural use. Anywhere where there is adequate irrigation and water supply in the greenbelt areas in the United States we will find rather solid land prices. No, not the same as in the city where skyscrapers are built, but in states like Kansas, Nebraska, Missouri, Colorado, Wyoming, and the fertile plains of California for instance.
Still, if an area gets significant rainfall, and is not irrigated, it is good for growing certain types of crops. Therefore it also is slightly moving up in value. In fact it's moved up in value by 6.5% in the last year. Consider if you will the drastic increases in crop commodities around the world. When there is a better return on investment in agricultural farming, the land becomes more valuable, and therefore is rebounding despite the recession and the cost of real estate in other states.
A very interesting article on this was in the Wall Street Journal recently published on November 23, 2010 and it was titled; "Land Becomes Cash Crop in Farm Belt," by Lauren Etter and Scott Kelman. The charts and graphs which accompany this article don't lie, they tell the true reality of farmland in many places in the United States. Likewise, another recent article suggested that similar things are happening in China.
It is my contention, and the thoughts here at our think tank which operates online, that these trends will continue, not only here but also in China, and that anytime there is a problem anywhere in the world with regards to wildfires, droughts, flooding, or serious typhoons and hurricanes, that the top of the supply curve will be reduced, and increasing the demand for such agricultural products, thus raising the price of the commodity and the farm land too.
Although, this shouldn't surprise anyone and it's basically economics 101, and it should be considered when looking at the overall numbers of raw land and real estate prices in the United States. Perhaps things aren't as bad as they seem, and it would appear that the free-market is helping the rebounding of real estate in the heartland. If you have other similar views, or would like to debate these points of contention, then I suggest you please e-mail me. Also I believe you should please consider this and think on it at your earliest convenience.
Additional Reference:
1.-Wall Street Journal article front page, "Farm Belt Bounces Back," by Scott Kilman, October 12, 2010.
Lance Winslow is the Founder of the Online Think Tank, a diverse group of achievers, experts, innovators, entrepreneurs, thinkers, futurists, academics, dreamers, leaders, and general all around brilliant minds. Lance Winslow hopes you've enjoyed today's discussion and topic. http://www.WorldThinkTank.net - Have an important subject to discuss, contact Lance Winslow.
No comments:
Post a Comment