I just returned from the National Land Conference in Charleston, South Carolina. This was an event put on by the REALTORS Land Institute. We had about 7 of us attend that were from our GA Chapter of RLI. More than anything this is just a great networking event. One of the topics at the Land Conference was just how connected we are now….Globalization….a one world market. It is so much easier to do business and communicate these days. And information: I can’t tell you how many times I have done Crash Courses in Subject Matter that I felt I needed to brush up on before going into a meeting…..and all that information is right there on the internet. It is a different world. But as my Dad would say…..you can stay behind that computer all you want, but you still need to get in front of someone to get something sold…..and I understand that……so we are always trying to achieve that balance.
LAND CONFERENCE NOTES
We had about 3 economist talk with our group…..and the consensus was pretty much that we are still improving. The Southeast in general really looked strong. You can look at our MLS numbers for the last 4 years and really see the increase in transactions in our market. From talking with other REALTORS, 2013 was a very good year for most REALTORS. Another indicator would be to look at the number of REALTORS who got active in the business again. We saw that in our own MLS.
Back to the Southeast. The economists really pushed our ports along our Coast: Norfolk, Charleston, Savannah, and Jacksonville. They also pointed out some issues with the Panama Canal and fuel restrictions for ships coming into California as a couple of reasons making East Coast business more attractive to our European Neighbors. Add rail, road, and other infrastructure to the mix and we have a good recipe for business. For years, the demographic prognosticators have foretold of the migration to the Southeast much in part due to the climate and quality of life. Maybe life does imitate the SEC. (Missouri and Texas). Just as the Hurricanes pushed folks up from Florida, I think these winter storms we have had this year will have the same effect on our neighbors to the North. I expect a good push in recreation land this year. Don’t forget about water…..here in the SE we have about 4 states that share the Floridan Aquifer which covers about 100,000 square miles…how is that for a water supply. You think growers in California are not paying attention to that.
Staying with the Land Conference…. As always there was talk of Tax Reform for 2015-2016, with Tax Credits and 1031 Exchanges on the chopping block. Changes in Depreciation and plans of disallowing the mortgage interest deduction. (REALTORS pay lots of money through RPAC, more money than any other group or industry association out there to fight these kinds of changes that negatively affect property owners.) So you say why should I use a REALTOR, this is why. REALTORS are the ones who keep their eyes on legislation that negatively affects property owners. REALTORS are the reason you did not get that 100% increase in Transfer Tax, you still have 1031 exchanges, Mortgage Deductions, and a whole lot of other benefits that come with property ownership. REALTORS are your watchdogs.
Another topic talked on was the Clean Water Act. The folks at the EPA and the Army Corp of Engineers are still trying to have jurisdiction over all waters on your property and not just the navigable water across your property. If this cannot be done through the Clean Water Act then the powers that be are looking at how this can be bone administratively by proposing new regulations. Once again this is what your REALTOR groups are watchdogging.
Flood Insurance- Changes taken place during our meeting…..Reform Bill was supposed to be passed. This is really a mess.
Farm Bill- Direct Payments Repealed, Limits place on payments, Strengthened Crop Insurance, Consolidated 23 programs into 13. Clarified Forest Roads as not a point source pollutant. People ask why are food stamp connected with the farm bill……..one explanation was that it helped garner support from both sides of the isle…..Democrats and Republicans.
Apparently the NRCS is coming out with something new….not sure exactly how to take that. What I gathered from that speaker was that the NRCS is really involved in a great deal of things. Stay tuned on that one. I do love the WEB SOIL SURVEY….a very big part of our business.
We had a 1031 Exchange Speaker- Mineral Lease is Exchangeable. And yes, conservation leases and Ag Leases are eligible for 1031 Treatment. Bill Board and Cell Phone Towers with the footprint surveyed out are eligible as well. I am sure some attorneys or tax guys will say they are not, and I would say to you talk with someone who does this type of work day in and day out, do your research. You don’t use one source in a research paper and you should not do it in life. As with anything, it is all about the details and making sure your property meets all the rules. Did you know there was a thing called a 1033 Exchange…for Condemnation Property? Better treatment on this one….still there are rules.
International Investment in Our Country- Canadians have been making a big push lately. (Canadian= Americans without Guns) So why are folks from other countries investing in US? 1. Stability/Safety of Investment 2. Best Return on Investment. 3. Easy to Buy and Own. 4. Favorable Currency Exchange. 5. Wide Variety of Choices-US has it all. So why the international focus on AG land? Supply the changing tastes of international growing middle class. Look at just the middle class of India and China……staggering…they need to lock down where their food supply will be coming from.
As told by an UGA economist that was brought down to Thomasville- Livestock Demand will be up because of increased consumer demand and lower feed prices, and row crop profits will be down because of decreased demand for Corn in ethanol production, yet fuel and fertilizer have not decreased.
On Farm Land- We have had about 4 Farm Booms in the past 100 years. The last 7 years has been the best we have seen. (US) We are in one now, but it is starting to slow. Much of this boom was probably pushed by ethanol, bio fuels, and high commodity prices. Most of our panel of economist agreed that the boom we are in is slowing. Farm Land is still king and I think populations will still push that, but we are still seeing a slowing of pulling the trigger on some transactions where there is more number crunching going on. One topic that was brought up was that of the Grain Embargo, under President Carter, and what that did to land prices and farmers. That was something that you did not see coming but was something that came as a response to an action on the other side of the world. Globalization-One Market, and even more so now if you think about it. So what do you do? Pray a whole bunch! Diversify, Have your back up plans, and Back Doors and my favorite. Have lots of Children….and maybe one will stick around the area and take care of you when you get older……built in health care.
Locally what did we see last year?
Farm Land was still awesome. Good prices. Good Demand.
We saw the bottom and in some land types, a bump of improvement. Commercial Rentals have been huge over the last couple of years. Residential rentals have always been strong. I have noticed there seems to be a lot more residential rental inventory coming into the market. Many from bank owned properties. There may be some saturation there.
Conversion of Timber Land with Good Soils, to Farm Land. Many large plantations are doing some of this. Farmers are clearing land around existing fields trying to squeeze every bit of utility they can out of their farms. You don’t have to drive far to see a shiny new irrigation pivot sitting in a field. Pecans are still huge. There has been significant acreage put in Pecans. My guess is we will have a bumper crop of pecans in about 7 years.
Residential Market steady and improving.
Downtown Thomasville on Fire……we have a commercial building under contract now with backup interest. That whole area is just jumping these days. That is really huge. I love Thomasville. We purchased a small building downtown and have both sides rented….. just a super return. We like being a part of what is going on down there.