Wilderness Realty

Buy land now before inflation hits!  I am not usually pessimistic and I certainly do not wish for higher inflation.  Unfortunately recent events in the financial arena do not bode well for this rather distasteful scenario.

 For over a decade we have been blessed with low inflation especially when compared to the late 1970’s.  The Federal Reserve has accomplished this by tinkering with interest rates. 

 Another Fed strategy to keep inflation at bay is to control the money supply.  The current administration is spending tremendous amounts of money at a never before seen historic high rate.  To account for this increased spending, the US government is printing money at an also never before seen historic high rate.  This has an effect of lowering the value of the dollar.

 Over time this devaluation of the dollar will lead to inflation.  To counteract that, the Fed will increase interest rates; which generally have a negative effect on economic growth.

 Under this scenario, prices for goods go up including land.  If you buy land now and inflation starts to increase in the future, so too will the value of your land investment.  This would be a good strategy to preserve the value of your money; turn your cash into land!  So instead of having a bunch of dollars losing value; you now have land increasing in value and in the future will be worth more dollars.

 If inflation gets to be real bad, more people will buy land, which is a finite resource, and cause land prices to increase even more.  The sooner you become a landowner in the “inflation cycle” the better off you will be financially.

 Although the current consumer mood is to hold back in these uncertain times, the continuing government spending spree and consequential increase in the printing of money makes a land purchase pretty attractive.

Some points to ponder regarding the economy:

• The market is up 75% on average one year since the stock market lows of March, 2009.  The DOW  is poised to break 11,000 for the first time since the end of September, 2008.

• Personal spending is up for the 5^th straight month.

• Manufacturing is growing faster than expected.

• Home values are increasing.

• Consumer confidence increased in March.

• Foreign markets are on the rise too, especially in Europe and China.

 This is all good news.  Does this mean that demand for land is on the rise?  From our experience, phone calls are up over 100% in March when compared to February and January of this year.

 Couple this with some of the most unbelievably favorable weather in central Maine this year.  We escaped the big snowstorms that socked southern New England and the mid Atlantic.  Temperatures have been mild since early February.  Most lakes shed their ice last week, a phenomenon that rarely occurs before April 1^st.  Even though we did get some heavy rain in the past two weeks, it was far less than southern Maine and points further south.

 The bottom line is our snow is gone, grass is starting to green and we have incredibly warm temperatures.  We have not seen this kind of weather pattern for 30+ years.

 This is the perfect time to look at land.  Prices are low and interest is increasing.  If you have been sitting on the sidelines waiting for improvement, now is a good time to look around.

 Brokers at Wilderness Realty are available weekdays and weekends to show property.  Give us a call and make an appointment, 207-947-7957.

From time to time this year, I will post blogs regarding my personal experiences as a Maine landowner.  Instead of generalities regarding land ownership being hurled at you, my “stories” will be actual accounts espousing actual benefits that I am deriving from my property.  Perhaps these accounts will spur readers to take action and join in on this unique aspect of Americana; the right for anyone to own land.  These posts will be categorized under MY LAND.

 Today, however, I want to bring to your attention a great article that I came across a week or so ago.  It reinforces many of the same benefits that I have been writing about the past year regarding land ownership; in particular, timberland.  I realize that this article is written about the traditional large timberland holdings in the US; nonetheless, the principles apply to smaller woodlot owners as well. 

 If you have any doubts, put this ad in the classifieds, “WANTED: SOMEONE TO CUT MY WOODLOT”.  Your phone will be ringing off the hook.  The competition for stumpage in Maine is fierce.  Your timberland is worth more than you think. 

 Click on the link below and enjoy.

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Generally there are two types of owner financing available to buyers of land.  The first is contract for deed or “rent to own”.  The most notable distinction regarding this financing instrument is that title does not pass to the purchaser until the financing obligations of the contract are fulfilled.  Any improvements to the land made by the purchaser are to the benefit of the title holder, the seller.

 The other financing method is the amortization mortgage loan.  Usually a deposit is required and the remaining balance is paid on a periodic basis according to an amortization schedule.  Payments are generally applied to interest first and then principle.  Early in the schedule most of the periodic payment goes towards interest.  Later in the schedule more and more of the payment goes towards the principle.  Title passes to the buyer and the buyer conveys a security interest to the seller via a mortgage.  As long as the buyer makes the payments according the attendant promissory note, title remains as the buyer’s.  If the buyer defaults on the payments, then mechanisms in the mortgage are triggered and the property is foreclosed; title goes back to the seller.

 Any improvements by the buyer are to the benefit of the buyer, the title holder.  This is an important concept for those land buyers who want to build on their property before the scheduled payoff.

 Currently, all of Wilderness Realty’s land listings can be financed by the amortization mortgage loan method. 

When buying land, seriously consider using the owner as a lender.  Under the current financial crisis, most banks and other traditional lending institutions are not loaning out money for raw land purchases.  Those that do lend have strict requirements which can be costly such as a high down payment, points, origination fees, appraisal fees, title insurance fees etc.

 Most owner financing deals are simple and straightforward.  Generally the only costs are legal fees needed to draft the appropriate documents.  An initial down payment at closing is usually the only requirement.

 Using the owner as a lender is also a good way to own a piece of land without paying the full price up front.  This allows the new owner to use his or her capital to make improvements which generally adds value to land.

 Wilderness Realty specializes in land sales and represents owners who offer owner financing.  Call 207-947-7957 for details regarding owner financing packages for our various listings.  This is a great way to be a landowner NOW and enjoy your investment for a longer period of time AND during the prime years of your life.  

Not a reference to the traditional act of compensating restaurant servers, but a source of income for timberland owners.  In Maine tipping is the harvesting of balsam fir brush or “tips” to make Christmas wreaths and other holiday decorations. 

 Many landowners in Maine have an over-abundance of young fir growing on their property.  There is a cottage industry of folks buying and selling fir tips.  This can be income for the landowner.

 The season lasts a month or so and Thanksgiving Week is the peak of tipping season.  Tippers go out on woodlots and pick the first 16-18 inches of fir branch tips as high as they can reach.  The tips are threaded on a stick which can be easily hauled about the fir stand.  When the stick gets too heavy, it is time to start a new stick.  Fir tips are sold by weight.

 There are large, commercial wreath makers in Downeast Maine as well as smaller operations scattered around the State.  There are hundreds of one person basement operations as well.  Landowners get paid a fee by tippers or actually go out and tip themselves and sell the brush. 

 Tipping is such a big business that there are State laws in place protecting the resource and those landowners who do not wish to have their fir tips harvested.  Tippers must have written landowner permission on their possession while plying their trade.  Fines are steep.

 A few passing notes.  Tipping does not harm the fir trees as long as the trees are tipped in moderation.  Most fir stands can withstand annual tippings.  The most profound response of the fir tree to tipping is to produce more tips the next year.  Eventually the trees grow too tall and the lower branches die back making bigger fir trees un-tippable.

 Fir tipping is but another example of income potential for Maine timberland owners.  The list keeps on a growing.

Now that the recession seems to be behind us (according to Fed Chairman, Ben Bernanke), the next question being bantered about in the real estate industry is; where do prices go from here?

 Some economists believe that stronger pricing will impact the marketplace in the very near future.  Real estate is selling, but at a reduced rate.  At the same time, few new sellers are entering the marketplace.  As inventories decline, there will be more buyers than sellers causing an upswing in prices. 

 Because there are plenty of good values out there, buyers still have the advantage.  Real estate values, along with commodity values in general, will rise as we move out of the recession and the economy picks up steam.

 Fall is a beautiful time of year, especially this year in Maine.  Wilderness Realty invites you to take a tour of our State’s lovely countryside for a first-hand look at some of the nicest properties that we have ever offered.  Real estate values are stable; buy now before the next price jump.     

Since the last posting, economic news is just getting better.  The DOW is well over 9000, pending home sales is up for the 5^th straight month and consumer spending is up for the 2^nd straight month.

Where to put your money?

Stocks?–still scary.

Bonds?–better, but I don’t know.

Futures?–risky! 

Commodities?–only if you’re a former first lady. 

A good place to put your hard earned cash is in MAINE LAND; that ULTIMATE SAFE HAVEN  which is set to rise in value along with the rest of the market.  Just a few years ago there were some large land sales in the south that averaged over $15K/acre.  Much of Wilderness Realty’s larger land holdings range from $1000 to $2000 per acre.  Check out our offerings on the website.

Also coming soon, Burnt Jacket website is currently being updated to include new information regarding BURNT JACKET SHORES AT MOOSEHEAD LAKE.  Only a handful of properties are being offered in this exclusive lakeside community on Moosehead Lake; the first “new” lots offered for sale in decades. 

 Some recent encouraging real estate trends in the residential market.  Interest rates are near historic lows, new housing starts are up, some “bidding-up” wars are occurring especially in some of the hardest hit markets and prices have stabilized on the national level.  The real estate market, though, still has a long way to go before it comes out of its most recent slump. 

 The land market, however, has reacted quite differently.  Most notably, activity in land sales just stopped.  Prices are generally stable.  There is not much land in foreclosure.  It seems that it is just sitting there waiting for some action.

 Perhaps these new positive trends in the housing market will be the signal for interest to increase in the land market.  Remember, the land market remained strong during the beginning of the housing decline.  Land prices did not follow housings’ escalating downward spiral; it just “flat-lined” months after the initial housing downturn.  Any good news in the housing market will also be good for land sales.  The point is, if you were contemplating buying land during this “crash” period, this could be your signal to get serious.        

Experts agree that the United States will return to positive economic growth in the last quarter of 2009 and will see stable growth in 2010.

 The current administration will see a deficit approaching two trillion dollars in fiscal year 2009.  Such a deficit will be four times the largest ever recorded.  For each dollar the government takes in; it will spend two.

 INFLATION.  One influential group of economists predict major inflation pressures after 2010 resulting from an aggressive monetary policy and massive budget deficits.  Savvy investors will be on the lookout for investments that keep up with inflation to insure that their portfolios beat inflation or at the very least maintain current day values.

 Timberland is a long term investment that has stayed abreast with inflation and over time has paid modest returns.  Wilderness Realty has a number of parcels with a healthy timber growing stock and in many cases plenty of other investment potential as well.

 For further details, contact a Wilderness Realty expert today.  There are only a limited number of inflation-buster properties available.