Just read about a real estate developer who bought a farm for 40.8 million in 2005. Developer went bankrupt and a farmer just bought the land back for 8 million in September. Don’t let the overalls fool ya…
What does this mean for real estate? Simply put, it means that people don’t want to live out in the middle of nowhere and commute to work. But, it goes far beyond that. Think about the price of gas. How about the fact that the 0% down payment, 3 year ARM loans for buyers with 500 credit score are no longer available. I could go on and on. Most importantly, we are seeing a major demographic shift. The idea of living closer to the city has come back in the mainstream.
What does that mean for prices for homes in the suburbs? The signs are already here. The largest concentration of foreclosures are located in the suburban neighborhoods.
This is a good article from the wsj about the new demand for farmland.