At exactly twelve noon on September 16, 1893, the roar of a cannon sparked the greatest land rush the United States has ever seen. Carried by all forms of transportation (horse, wagon, train, bicycle, or on foot), approximately 100,000 raced to claim land on an area of land in the Northern Oklahoma Territory. There had been a number of previous land rushes in the Territory, but this was the most important.
Many would be disappointed. There were only 42,000 parcels of land available, too few to satisfy the hopes of all who competed for land that day. Furthermore, many of the “Boomers” (those who had waited for the canyon to erupt before rushing into the land claim) discovered that several of the chosen parcels had already been claimed by “Sooners” who had slipped into the claim area. of land before the race began. The impact of the land rush was immediate, transforming the land almost overnight.
More than 100 years later, we find ourselves in the midst of a second land race. When finished, it will go down in history as the largest land rush in United States history, far eclipsing the Oklahoma land rush of the 1890s.
How will it be different? Baby boomers, investors, and institutional investment firms are preparing to buy up more than half of the usable land in the US in the next ten years. Did you know that there are approximately 1.6 billion acres (yes, billions, with a capital B) that can be bought and sold? The potential is for millions and millions of land transactions in the next few years.
Like the earlier “land rush,” the demand for land is going to transform who owns the land in our country and what they are going to use it for.
In last month’s article, I wrote about how Baby Boomers are buying land in all shapes, sizes, and types. Let’s read what the media is saying about who else is participating in this modern race for land:
Wall Street Journal
“Is it still possible to make money in real estate? With home prices plummeting, many people have finally stopped viewing their family mansion as a big bottomless bag of cash. But look beyond the door of home and find an alternative. real estate related opportunities that are holding up despite the current economic downturn, including rural land. Rising food prices, demand for corn-based ethanol, and the growing desire of many urbanites for a place in the country are making rural land more valuable.”
The New York Times
“The housing market may have cooled off, but investor demand may soon be heating up for at least one type of property: LAND. Some of the most attractive offers of late are coming from real estate developers and home builders, “They are selling parcels in many parts of the country as they reduce excess housing inventory. Even the smallest landowners, facing their own financial strains, are selling lots that were once earmarked for construction.”
“It’s time to start looking; I haven’t seen this market in 20 years,” said Jaime Raskulinecz, a NJ real estate investor who wants to buy land in the hard-hit market of Cape Coral, FL. He found lots for sale on or near the water at about a third to a half below their peak prices of two years ago. On a larger scale, H. Ray Alcorn Jr., a VA investor, is picking up commercial and residential parcels after two years on the sidelines. Using mostly cash, he has purchased more than 100 acres across Virginia this year, much of it at discounted prices, and has options to purchase more.”
Bloomberg.com
“…farmland is having its biggest resurgence in nearly 30 years as demand for Asian corn and soybeans and the ethanol industry drive commodity prices to record levels. From Iowa to South Dakota and Wyoming, rural land price gains have ranged from 78 percent to more than 200 percent, according to farmers and Farm Credit Services of America data.”
“TIAA-CREF, the largest retirement fund manager in the US, bought $340 million in farmland in seven states in December. The George Washington University plans to set aside $100 million for farm investments this year.”
“Farm values will likely increase at an annual rate of 6 to 10 percent over the next five years,” said Murray Wise, chief executive of Westchester Group Inc., manager of $550 million in global farm tracts. By comparison, the US median home is forecast to gain 1.2 percent through 2010 and remain below the 2006 peak of $221,900, the Mortgage Bankers Association said in Washington.
“It’s crazy right now,” said Mac Boyd, 65, a real estate broker in Arcola, IL, who has sold farms for more than three decades. “The land market has never been stronger.”
http://www.LandFlip.com, the leading land website, recently conducted a survey asking “When are you likely to buy land?” 73% responded that they plan to buy land in the next 12 months!
What is creating such interest in the land?
Retiring Baby Boomers – In my previous article, I documented that many Boomers are nearing retirement. Here is a snapshot of this group:
o 10,000 Boomers will retire every 24 hours!
o $17 trillion will flow out of retirement accounts over the next two decades into the hands of Boomers.
o 1 in 4 Boomers own more than one piece of real estate.
o 1/2 of Boomers own their home free and clear.
o 60% of Boomers plan to move to a rural setting.
Since 1 in 4 Baby Boomers own more than one property, the logical conclusion is that they will allocate a portion of their investment portfolio and purchase land in the near future.
Baby Boomers are buying up land, but it’s unlikely they’ll ever move onto the property
Where are the Boomers going to move when they retire? In a survey commissioned by the National Association of Realtors, 60% plan to move to a rural area when they retire. The operative word is PLAN. Many are in the process of buying large and small tracts of land across the country to fulfill their dream for the future. They will most likely never move into the property.
However, every day there are more and more Boomers entering the land arena to purchase their dream property, and they are ready to buy soon!
The Stock Market and the Drive to Buy Land
As in most business cycles, there are times when the stock market has not performed as investors expected. When the stock market is doing well, there is no reason for investors to look elsewhere to secure a modest return on investment. But, as we know, the stock market is mired in uncertainty. Because of this, some investors look to other investment options, such as tangible assets. Both private and institutional investors seek land as a safe haven to relocate part of their investment portfolio. This translates to billions of dollars moving into the land in the coming years.
The demand for land is repeated again, but this time at the national level! Also, there are brokers across the country reporting that they have more buyers than sellers. That is a great dilemma! If the stock market continues to be volatile, more and more investors are looking for land to cover part of their investment needs. Some are buying land like stocks and betting that it will increase in value in the next 5-10 years and outperform the stock market.
Don’t be left behind! Be a part of the next great land race!
When the dust settled, many walked away from the Oklahoma land rush disappointed and empty-handed. Don’t stay on the sidelines waiting for the next opportunity anymore. You can tell your kids that you were part of THE greatest land race in American history! There simply isn’t a better time to cash in on the land!
In the next few years there will be millions and millions of land transactions. I specialize in finding sellers, and you can too. The market needs investors like me to find affordable land for this new generation of buyers.
Some of you are saying, “Can I really buy and sell land?” Land is by far the simplest and easiest form of real estate on the planet. Don’t be intimidated because you’ve never done anything like this before. The market desperately needs more investors to take advantage of this once-in-a-lifetime opportunity. Won’t you join me?
Buy land. They have stopped making it. -Mark Twain
As featured in the October issue of Invest magazine
