Shiller still says Farmland is good investment

The headline at Farmland Forecast entitled "Shiller's Bullish Call is Farmland" written by Colvin & Co. which is an agriculture-focused investment management firm that specializes in helping investors with farmland in the corn belt is yet another article on Shiller's Bullish Call for Farmland.

Robert Shiller is an economics professor at Yale University who has written extensively on the subprime crisis and real estate ethical issues including writings on financial markets, financial innovation, behavioral economics, macroeconomics, real estate, statistical methods, and on public attitudes, opinions, and moral judgments regarding markets.

He was speaking at Investment Management Consultants Association's annual conference in Las Vegas and he spoke about farmland as being one of the only investments that will provide a good return over the next 10 years. He said that stocks will be low and gain only 2-3%.

“My only bullish call is farmland,” he said. The reason farmland has held much of the gains that it built up during the real estate bubble, he said, is because, unlike housing, there is a limited supply.

“A single logical error that people make when buying a home is that they think buying a home is the same as buying land,” he said. “But in the total price of a house, only 20% is the land.”

He also talked about our financial shape and how it is worse now even though the recession is over. He also talked about the real unemployment rate which is effectively 15.9% taking in other factors. Consumer confidence is low and he points out that is going to be a major problem because when confidence is low that means spending is low.

The full article reviewing Mr. Shiller's presentation is at Investment News. One thing that is particularly interesting is that he said the rumblings were in the market as early as 2004 and that the commercial markets felt it first so watching for any unsettling signs in the farmland market early on will be the best warning signal for farmland investors. However, farmers themselves usually have more than a ten year outlook so even though farmland may be a popular tool for investors, farmers are the real true investors of land over time and recent high incomes for farmers as reported by the Fed and other banking news shows that Shiller is probably right on target for good returns for your farmland investment.

If you are considering investing in farmland and would like market information in a particular county in Kansas please contact us at 800-557-9151