By Jim Copeland, El Dorado County Territory Manager
During my time in college during the tumultuous 1960’s, I observed an undercurrent of younger people who were “dropping out” and running to rural land with ideas of organic farming and self-sufficiency…a time of seeking alternatives away from the chaos during that time. What became of those people? Where are they now?
For the most part, most of these individuals joined the mainstream, became successful, formed families and are now in their sixties and seventies. Some are retired; some are still in positions of responsibility. They are successful, very intelligent, have 401K’s and have accumulated other assets. And they’re calling me and my peers who deal with rural, ranch and recreational land.
In the course of learning about my clients’ families, their lives and their dreams, I see a common thread and common beliefs.
- There is fear, but not to the point of panic.
- To a person, they agree that the politically-touted “recovery” is neither real nor long-lasting.
- There is fear that the stock market is ready for a major tumble and that the housing recovery will be short-lived.
- They want to preserve their assets.
- They want to find a stable “store of value” that has the potential for appreciation.
- They want something that can provide physical basics…shelter, food and safety.
- They want the option of having a garden and/or raising a few head of cattle.
- They want recreational options.
It is the land, after all, that is a limited commodity. It is properly selected land that can provide for these concerns and fulfill these dreams. The preamble of the National Association of Realtors says, “Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization.” Nations rise and fall over the acquisition and utilization of land. We’re blessed in this country to have the option to buy and use this valuable and necessary asset.
My clients amaze me with the similarity of their dreams and goals. The challenge for me is locating land that will match their requirements. Scarcity is a real issue. Depending on which state you live in, the government can own a huge percentage of the total land area. For example, in Nevada the government owns 87% of the available land supply. In California, the government owns 50% of the land. In my own county, the government
(BLM, USFS, etc.) owns 52% …most of it in pristine forests and wilderness areas. When you take away the urban and suburban areas you further shrink the supply. It is in that scarcity that value is born in rural, ranch, farm and recreational land. It is in that scarcity that people are realizing they can find what they seek. The increase in value of farm land in the last five years underscores that fact.
An additional notion that my clients are sharing with me is their belief that the current home price bubble is much like the stock market…it is at a precarious moment, perhaps waiting to tumble once again. The increase in home values has been short in duration and already there are warning signs. Even with today’s low mortgage interest rates, the housing inventory is increasing and price appreciation is slowing. Perhaps the greatest red flag in the housing market in California is the reduction in the number of families who can qualify for a median priced home, dropping from 50% of families two years ago to 33% today. My clients are considering the sale of their current homes, the acquisition of more land in a rural area and a smaller home with fewer frills. They’re coming to the realization that there may be more long-term value and safety in the land than the structure that sits on it. In addition, they don’t like the deterioration of neighborhoods in the cities and certain suburbs where they now live.
After all is said and done, the land remains. In the years to come, usable land may become even scarcer due to increasing regulations of federal agencies, such as the EPA, and the acquisition of scenic areas by non-profit environmental groups seeking outright ownership or conservation easements. Such trends are clear and should be considered another factor affecting the decreasing supply of available land.
El Dorado County Territory Manager California Outdoor Properties, Inc.