2008 recession land pricing question

[street]

I tried doing some searching on land pricing during the 2008 recession era. I was told that land spiked very high during that time, but I don't remember that at all.

I don't remember land selling at all time highs during that time. Can someone shed some light what they remembered of any large price increase in land at that time.

I'm talking buying/selling land at record prices not what the value was of land at that time period?

 

[Markola]

I’m interested, too, and find myself wasting time on real estate sites wondering what’s happening.

I’m only marginally knowledgeable but it probably depends on the highest and best economic use for a given piece of land. Here in the Midwest where I live, farmland prices track the price of various crops pretty well, and in the Southeast, where I’m from, timber and paper prices. I would imagine land for building houses slumped in the Great Recession. With the fracking boom circa 2010, one probably couldn’t buy land in the oil and gas patches for any amount of $. Land prices probably move in inverse relation to interest rates, as with houses. My armchair observations, probably worth what you paid for them. [emoji857]

 

[Onward]

Residential and commercial real estate plummeted in 2008.

I can't imagine that raw land, in general, did any better?

 

[pb4uski]

+1 Doesn't make sense that it went up.

 

[audreyh1]

Agreed.

 

[FlaGator]

I worked in real estate finance through two complete cycles including booms and busts both times.

Home prices get a lot of analysis due to the availability of data and the volume of transactions. IME, land prices are tracked by commercial RE firms and are held closely. The info is in the public record but demand for it is limited.

What I saw is that the price of land targeted for residential development collapsed during the busts and sales, even at substantially lower prices, were few and far between

 

[Scrapr]

Raw land for homes collapsed in '08. Contractors/Developers were giving land back to banks "in lieu" of foreclosure. Some of this was partially developed. Some just platted and waiting. Some went back to the lender in foreclosure. Then the lender took the developers home & assets to satisfy the loan balance. I stopped counting developer suicides at 12 that I knew

The developers that were lucky were the ones near the end of a phase in a project. They had paid off or most of the A&D loan by that time. The ones that were unlucky had just broke ground on model homes. That sucked

As the market collapsed national builders or syndicates came in & bought land for cheap. One local builder "talked down" the market when he was interviewed. I suspect to buy more cheap land

This is development land. Ranch, farm, timber or other might be different

 

[slingshot]

Farmland prices did go up 2008-2010. Illinois and Iowa

 

[OldShooter]

Our lake home went down 20-30% on the assessors rolls. Very happy to pay less in taxes. I don't remember what our city home did.

I suggest you make a personal visit to a county assessor's office and ask your question. In my limited experience they are pretty laid back places; you might be able to find an old bear who likes to talk about history.

 

[street]

Thanks and that is what I thought I would get. I did some searching again and raw land and real-estate went down across the board nation wide.

 

[brewer12345]

I can remember during that period that things got so bad that developers in my area who had platted ag land into lots were trying to turn it back into ag land.

 

[Onward]

And now I can trot out one my favorite sayings, which even seasoned investors may forget...

Never confuse a lack of liquidity with a lack of volatility.

 

[Markola]

And now I can trot out one my favorite sayings, which even seasoned investors may forget...

Never confuse a lack of liquidity with a lack of volatility.

+1. I heard a private equity investor say as much in the Great Recession.