Archive for October, 2008

Land Auctions During the Financial Crisis

Thursday, October 9th, 2008

Sandoval Auction

I attended a county tax auction for land on September 24, 2008 in Sandoval County, NM. Despite the financial crisis due to the credit crunch, falling stock market and falling Real Estate prices there was a healthy attendence at the tax auction. Approximately one hundred bidders participated and this was about the same as the county auction in April of this year. The auction prices were also similar.

I talked to some of the participants and they were hoping that there would be a lower participation and hence lower land prices, but that was not the case.

People are still considering land to be a solid investment.

by Andreas Paramonoff

Credit Crunch and Land

Thursday, October 2nd, 2008

 Stock Market and Land

In the credit crunch and economic crisis it makes even more sense to have quality land as part of you portfolio for these reasons:

1. Its a hedge against inflation. The currency can be inflated by the politicians, but they can’t print anymore land.

2. It is a hedge against deflation. Deflation causes financial instituiton failures and that doesn’t effect your land.

3. It is not dependent on someone elses promise. Bank instruments, money market funds, stocks bonds are dependant on some company to fulfill its obligations. Land is yours, plain and simple.

4. All these bailouts will lead to higher taxes. Doesn’t effect land in the short term since you can just hold it and not sell.

5. Currencies can go up and down. Your land will stay.

6. No matter what happens, you have a nice piece of land that is yours. 

by Andreas Paramonoff