For those of you interested in understanding some of the supply and demand issues around Water Rights in Nevada and the Colorado River Basin, as well as geo political wrangling, here are some links. If you would like own some Nevada Ground Water Rights, you need to call me, I have some very nice farm and ranch land listed with water rights.
As you can tell there is plenty of science and opinion involved in these discussions. One thing seems clear to me, we are using or soon will be using more water than we have available. The opportunity to purchase irrigated farm and ranch land is today. The chances this land with water rights is going to get any less expense in the seems very slim. One day you will not be able to buy it any price.
Recent water rights sale transactions in Nevadaincludes 35 shares of Virgin River surface water. There are about 10 acre feet per share under the Virgin River Share arrangement in the Mesquite and Bunkerville irrigation system.
"In 1961 water shares in the valley were worth $14 per share and you were a damn fool to buy them" stated Cecil Leavitt, a Virgin Valley board director. He went on to say "Today they are worth more than the land".
The final sale price for the 35 shares was $2,801,968 or about $80,056 per share. That translates to over $8000 per acre foot for surface water rights.
The surface water is not currently used by the buyer of the rights, Virgin Valley Water District as drinking water. Construction of a water treatment plant to purify the water will be required for the local rate payers to see any beneficial use from the purchase.
There are few reasons the district would go ahead with the purchase now, except the fact that if they did not buy the shares now, Southern Nevada Water Authority might. Once they are owned and headed to Las Vegas they would never be available in the Virgin River Valley again.
This story will play out across Nevada over and over in the next few years. Basins are being closed to additional allocations, additional permits are being denied. What currently exists will only increase in value. Demand continues to grow from domestic growth to agricultural needs and uses.
Funny to hear "you would have to have been a damn fool to pay $14 a share in 1961, and it just sold for over $80,000 ".
When most people think of farm land and ranch property, they think open ranges, hay fields, cattle and cowboys riding horses.
Wall Street seems like a far off place in another world. A fast paced place driven by profit and greed.
It seems the classic contradiction, slower paced, straight talking, down to earth folks making their living off the land verses the Bernie Madoff and George Soros types.
Truth is, the story I am about to tell you just may be a little sad, because Wall Street is buying up the farm. Over the past few years investment power houses like BlackRock, and retirement plan giants like TIAA-CREF has been plowing money into farmland. In Nevada farm land generally means land with water rights, due to the arid climate.
These are smart people who are motivated by money and profit.
Here is the deal; the fundamentals are in place for a long term boom in prices for everything AG-related. Consider this; in 1960 there were 1.1 acres of arable farmland per person globally, according to data from the United Nations. By 2000 that number had fallen to .6 acres. Over the next 40 years the world population is projected to grow from 6 billion to 9 billion.
According to Joachim von Braun, director general of the International Food Policy Research Institute, "Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050". "With limited land and water resources, this will automatically lead to increased valuations of productive land." Von Braun goes on to say, "It goes hand in hand with water, Water scarcity will probably increase even more than land."
Water in Nevada is today in short supply and clearly demand will outpace supply as they continue to close basins to new permits. Water rights in Nevada have another issue facing the dwindling supply, the demographic shift of the baby boomers to the more tax favorable warmer climate. Choices, decisions, are being made today, do we use the water for agriculture and food production, or do we pipe to Las Vegas for culinary use.
Farmers and ranchers want to stay in the business, but millions of dollars waved under their noses make it tough to say no to the sale. Many will stay on and lease to continue to live the lifestyle they love. These lease payments are cash flow on the investments. Could it be a win-win situation?
Commodities guru Jim Rogers says, "I'm convinced that farmland is going to be one of the best investments of our time."
Farmers are smart and they talk, they may wear overalls and talk funny, but farming is older than Wall Street. Water and food are the sources of life for the planet, demand is guaranteed to grow. There are few guarantees on Wall Street. Farming is a difficult business, but it is a fine tuned machine, executed right it is a profit opportunity.
Fortune magazine, June 22, 2009 issue has a good article on "Why Farm Land is Hot". Why ETF's are investing today for the long haul on the food and water shortages in our future. From 1960 to 2000 the world went from over one acre of arable land per person to just over a half acre of arable land per person.
Growing populations and the shrinking supply of arable land will be a key focus of humanity as millions starve in the not too distant future. Water in many locations is the key to food production.
Water rights in Nevadaare our most valuable resource. Irrigated agricultural land is available and the prices are increasing. Many basins in Nevada are closed to any future additional water rights, the supply side is very limited and will not increase. While demand continues to grow, with or without future housing developments.
We have cattle ranches with live springs filling stock tanks to water the cattle, and the ranch owns those water rights. We have sections of land with irrigation pivots watering grains like wheat and barley, as well as potatoes, and alfalfa. These irrigation pivots are fed from wells on the land and the farmers own those water rights.
Many farmers are willing to pay handsome lease payments to farm this ground, offering good rates of return to investors. You can own a half full strip mall with falling rents and potential future higher vacancy rates, or farm land with water rights.
Investing in agricultural land requires in-depth knowledge of local regulations, state agencies, soil quality, regional climate data and much more. Professional representation is critical to your investment success.
I have many properties available and each one is unique in use and potential. Call me today to discuss your needs and which property might fit your needs. Nevada Ranch Properties your source for quality agricultural land sales and services.
Beware of pending home sales numbers, the conversion rate from pending to actually closed transactions is falling daily as deals blow up. Pending short sales in general are not closing. When you hear pending home sales, it is a misleading indicator.
In Mesquite we actually closed:
Median Price $ Per Square foot
39 Resale Homes $192,400 $113
13 New Homes $208,984 $125
15 Condos $87,500 $77
29 Town Homes $130,000 $88
Total 93 closed sales $150,900 $99
43 of the total 93 were distressed properties.
229 listings went out of the active inventory as failed. Active available listed residential property remained stable at around 400 with over 60% vacant.
221 new listings were added to active and 85 of those were distressed properties, either short sales or bank owned (REO) foreclosures. "Notice of defaults" continue to increase. Between Spet. 1 and Oct. 12 there were 54 NOD's filed in Mesquite, that is 9 per week!
2 vacant lots sold in Calais and averaged $125,000.
No commercial transactions closed. Vacancy remains at historic high rate in all catagories.
The market is averaging around twenty active resale listings at Sun City, but you would never know it since they do not allow signs, period, even inside your own window.
Over 50% of the current pending transactions are distressed properties. The banks are holding more and more real estate as defaults rise and individuals realize they are stuck as well. Unrealized bank losses are mounting as wealth evaporates.
The amount of shadow inventory is impossible to calculate. Based on unlisted bank owned property, defaults and failed listings, the number is far larger than the 400 active listings, maybe double.
Given the future uncertainty in taxation, health care costs, income, asset value growth, cost of living inflation, and home values retiring buyers have become increasingly cautious. The market is mainly being supported by high loan to value government backed FHA loans, and interest rate risk appears far greater than home price increases. Prices continue to fall.
There are seemingly good values available.......Buyer Beware!
Mesquite Nevada Real Estate Market Still on Life Support
If the Mesquite, Nevada real estate market were a patient in the hospital, it is still in ICU. The market remains on life support, plagued by high vacancy, defaults, foreclosures, existing, and new home supply. Builders continue to put downward price pressure on existing home sales with lower pricing and incentives.
Then there is the shadow inventory. The picture is clouded by the bank owned REO properties as the banks fumble with unrealized losses, those toxic assets. Clearing of this segment of the market will be a pivotal point, but it remains unclear as to how many are out there and at what price will they be liquidated. As the banks push these properties into the market prices continue to fall.
The main support in the market is coming from your tax dollars in the form of first time home buyers tax credit, and high loan to value government backed loans. Cash buyers and investors are nibbling around the edges, but remain tight fisted and cautious.
The next few quarters will bring more competitive pressure to the market from banks, builders, distressed sellers, and short sales. Prices should get even better for buyers willing to be patient.
Recovery will be hampered by new tighter lending regulations being developed and implemented at this time. It appears excessive leverage of debt will not be allowed.
Clearly there has been a shift within the consumers and the world as to how they view leverage and debt. Affordability will be high on the radar screen of all.
Remember the market cheer leaders have their own motives and agenda.
Buyer beware continues to be the smart buyers maxim.
Interested in the future of Real Estate development and agribusiness in Nevada?
Look closely at the water supply. Look closely at the water rights for sale.
Southern Nevada Water Authority is planning a 327 mile pipeline to bring more water to the Las Vegas Valley at a cost of 3.5 billion dollars. This fact alone should tell you something about the available supply.
Whether it is climate change, normal drought, or increased demand, the future for water's value has only one way to go. One thing is certain, we can not live with out it. Water rights in Nevada and the Southwest in general are going to be in the news more and more as demand strains supply.
Some say water will be more valuable than oil to future generations. At the most basic level it already is.
Nevada Water Resources is sponsoring a dinner September 22, 2009, "Water Crisis in California: Challenges Faced by Metropolitan Water District to Adapt to Long-term Water Curtailments".
The term "prior appropriation" when it comes to water rights in Nevada could become very meaningful to those who may be asked to turn off the pumps. The State Engineers Office states it this way;
Nevada's first water statute was enacted in 1866 and has been amended many times since then. Today, the law serves the people of Nevada by managing the state's valuable water resources in a fair and equitable manner. Nevada water law has the flexibility to accommodate new and growing uses of water in Nevada while protecting those who have used the water in the past.
Nevada water law is based on two fundamental concepts: prior appropriation and beneficial use. Prior appropriation (also known as "first in time, first in right") allows for the orderly use of the state's water resources by granting priority to senior water rights. This concept ensures the senior uses are protected, even as new uses for water are allocated.
The option of a slower, freer lifestyle is appealing to many baby boomers.
The future retirees are young and active with many interests. Some prefer club houses, golf courses, casinos, and social clubs. Others have dreams of getting out of town.
Today with modern technology and simple solar orientation a home on a few acres can become a self sustaining lifestyle. A few fruit trees, a garden, these are personally rewarding activities.
In Southern Nevada there are few places for this type of setting. I believe Lincoln County, Nevada is set to explode. Not over night, but there are many who long for this rural self fulfilling lifestyle.
Ninety seven percent of Lincoln County is public owned lands, the private land is scare.
Water rights to develop the land are even harder to come by. Where else can the future growth and demand go within a couple of hundred miles of Las Vegas?
The cooler weather and four seasons offer much better growing conditions, and it is not so hot. This is right out of the old west, check out lincolncountylandmarket.com. There will be public land auctions, BLM land sales in the future in Lincoln County, Nevada.
I met a great lady visiting from Ohio and as we discussed this shift in the minds of a relatively wild generation, she said "we are becoming our parents". Whether they lived through the great depression or grew up hearing about it, they lived their lives more frugally than we have.
For many this lifestyle exposure was when they went to visit grandparents. Clearly this new environment with horse barns, solar reliance, hen houses and independence will be a life changing event. For longtime city dwellers, a whole foods type of back to the earth lifestyle change.
Off the grid is a worthy goal. Technology in solar applications is getting lots of attention and government money. Greater efficiency is being achieved all the time.
General self reliance and a greater lack of dependence on the outside world a desirable and worthy as well. Maybe we are becoming our grandparents!
Flatnose Ranch is an awesome working hay farm with a rich history, at 1200 acres it is prime transition land. Located ten miles East of Pioche, Nevada, adjacent to Echo Canyon State Park and mostly surrounded by public lands. With eight wells and over 2600 acre feet of water rights, at 5000 feet above sea level, Flatnose has all the makings of rural retirement community.
If you did not have spending $20 million in mind then maybe a 256 acre old homestead with over 1000 acre feet of water rights in Lincoln County priced at $1,950,000. It is all about the water. There are number of larger working irrigated farms available, if farming for a real living is more your style.
I would be very interested in your comments on these ideas. Would you live on a small farm?
For more information about irrigated Nevada farm and ranch land with water rights visit nevadaranchproperties.com
The State of Nevada just got a little drier, which is tough news for many since it is already the most arid state in the nation.
The $550,000 cloud seeding program that produces as much as 65,000 acre feet of additional precipitation annually has been cut from the state budget. That is about enough water to supply 130,000 households per year.
The real pain will be felt by the rangelands, farmers, and wildlife who will suffer from less water. The Cattlemen's association, Nevada Farm Bureau, and Elko County Commission have urged law makers to save the program.
On average Nevada receives about 9.5 inches in annual precipitation. The decision is also at odds with current weather pattern, as Nevada is suffering from drought conditions already.
Hay farmers will benefit as a result of less grassy rangelands, farmers will be forced to buy more hay. The hay farmers deserve a break this year anyway.
Irrigated farm land with water rights will benefit. Many basins are closed to additional allocations for ground water permits. The supply side of this irrigated land, our food chain supply land will see huge increases in value as time goes on.
Demand for water in Nevada goes well beyond agriculture in much of Nevada. Future population shift projections threaten to eventually strain the supply to the breaking point.
I currently have numerous parcels of irrigated land for sale with ground water rights. While agents across the nation tell their clients to lower the prices on all types of properties from residential properties to commercial centers, I am advising that it may time raise the price of irrigated farm land with water rights in Nevada.
$4500 dollars in free money to anyone who will trade in a perfectly good car that gets less than 18 miles per gallon. Most of these new car buyers will borrow most of the additional money needed to purchase one of these new more efficient cars. So far so good, more efficient cleaner cars on the road, more auto sales have to be good for the car makers and therefore jobs and the banks get to make more loans.
Of course the $4500 isn't exactly free, at least not to all of us as a collective group; we are the ones giving it away through our government.
Since when do I care about cars or government giveaways? I write about real estate.
New car loans will reduce the number of people we can sell homes to over the next few years. More consumer debt is and has been the problem.
Under the newer existing and newer yet to be completed financial consumer protection rules, underwriting standards for home mortgages are getting tighter.
Consumer debt to income ratios affect their ability to take out a new mortgage. Mortgage lenders will count the new car payment loan against the borrower. For some of the cash for clunkers buyers that will be taking on a new car payment, that additional debt will push their debt to income ratio too high to qualify for a new mortgage.
In order for the housing market to really open up, consumers must reduce debt, not increase it.The $8,000 first time homebuyer's tax credit and the cash for clunkers are two of the most direct to the consumer stimulus funding programs. Both will help get money moving again.
If you plan to use both programs, buy the house first. Let me repeat that, buy the house first. The auto lender will in general view home ownership as a positive thing. While the mortgage lender may use the new car loan as a reason to deny you a new mortgage.
Whether you qualify for the $8,000 first time home buyers credit or not, if you think you may want to jump into homeownership in the next couple of years. Take the time to talk to a mortgage lender about your debt to income ratio and what a new car payment will do to your ability to get a mortgage. Please do this before you run out and test drive that new car.
Mesquite Nevada Real Estate, Market Information designed to help consumers make good decisions. Nevada farm and ranch land market including land with water rights. Farms and ranches for sale, water rights transfers, pipelines etc.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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