Farmland......The best hedge against inflation?

Our current world economy seems to be headed towards a recession. Investors traditionally avoid the financial and building sectors during times of recession, while investing broadly in commodities such as gold, oil, and agricultural commodities. These listed commodities have risen steadily in recent times, while the banks and insurance companies of the financial sector have taken a recent beating. The farmland that producers depend on for the production of agricultural commodities has skyrocketed in recent years. Quality farmland has had a sharp increase in value, while residential and commercial improved real estate has trended down.

Residential housing markets in some parts of the country are experiencing a trend towards values lower than those of market highs just a few short years ago. A home purchased on the open market for $200,000 in 2005, may just bring $160,000 today with similar market exposure.

Quality agricultural land valued at $3,500/acre in 2005 can easily bring $5,000/acre in 2008, with its value truly supported. It is hard to find such a simplistic investment that has such constant and proven demand.

Many REIT's(real estate investment trusts), family trusts, banks, and institutional owners are choosing to maximize their cash position going into a time of economic uncertainty. Divesting land assets at time of peak prices can free up cash to cover other obligations.

On the same token, investors seeking stability in the markets are flocking to farm land for its solid returns and market appreciation.

Bottom line: it's a great time to buy and sell land!

Real estate properly sold at auction ALWAYS brings full market value!

VersaLand Real Estate Auction Group. Leaders in the field.