market report spring 2023

Here we are again in uncharted waters with new benchmarks being set in various sectors of the economy. Things seem to be happening so quickly that today's news is practically old news by the end of the week. In an effort to stay relevant, let's look specifically at a topic that will impact everyone reading this. Regardless of whether you borrow money, we all have some relationship or tie to the banking industry so in short we're all impacted by what happens to them. So far, the "Federal Reserve" just finished the tenth interest rate hike in the past 14 months. These rate hikes are represented as a way to slow the inflating market we experienced in 2021-2022 as a product of trillions of dollars that were created and distributed during the worldwide lockdown. This action seems to be working, however, slowing the economy isn't all these rate hikes are doing. The higher rates are devaluing the assets held by the banks and basically causing numerous banks to become overleveraged for lack of a better term. For a group of people that are supposed to understand the dynamics of finance, it almost seems like they created the environment we now find ourselves. They can't claim they didn't know what was going to happen when they handed out cash and dropped interest rates in 2020. Regardless of the how or why it appears there are several more banks waffling so this is going to continue at least into the near future.

How does this banking crisis impact land values, ownership, sales, and business related to land? So far the only impacts we have seen regionally are interest rate hikes and some behavior changes by the consumer. Many people that would borrow long-term money at 5% choose not to borrow at 8 or 9%. Some of those potential buyers are now either on the sidelines waiting for things to level out while others are using their cash. While banks may be collapsing, there are many more banks that aren't and those banks hold the assets of many many individuals that have millions of dollars in cash deposits. Some of those holding cash are losing confidence in the banks and moving their cash into hard assets including land and precious metals. Frankly, cash has been going down in value and hard assets are holding steady with inflation or exceeding their value against the dollar. On May 4th, gold hit an all-time record high and silver is also in a very steady position.

Since the last issue of The Land Catalog, we have seen a sales volume that reminds me more of the 2018-2019 timeframe. There is still good demand in the market but the number of transactions has slowed from 2022. The average buyer is struggling to comprehend this "new market" we find ourselves in. In essence, the dollar lost value similar to when a company does a stock split. Only this time we had a dollar split so we have more dollars and they're worth less. To wrap it all up I would say this market is if you want to sell, there are plenty of buyers looking for land. If you're a buyer you may have to wait a bit to find the right place because inventory is low but it is increasing every day! Land doesn't typically return the highest cash flow returns but it sure is great to own, manage and enjoy this unique asset class!

Dewey County, OK Epic Whitetail River Ranch

$5,013,200

2,005 +/- acres Relative Scarcity...when a resource is limited in supply, naturally. This is the term that defines a 2,000+ acre ranch within 1.5 hrs of Oklahoma City with 4.5+/- miles of South Canadian River frontage. It is extremely rare to find a ranch of this size that boasts this much river frontage but especially this close to Oklahoma City! To top it off, the upland portion consists of over 320+/- Acres of tillable farmland currently planted in Rye.