With Inflation Running Hot, Hard Assets Are A Refuge

Source – landthink.com

  • “…Investing in real estate offers advantages during inflationary periods and a diversified portfolio offers strong and stable returns. As inflation rises, so do property values, so landowners will see appreciation. With the land inventory shortage so acute, owners have already seen their assets increase more quickly than at any time in recent memory”

Pulse: Land Prices Expected to Keep Climbing in 2022

  • With inflation running hot, hard assets are a refuge

Typically hard assets are an excellent hedge against inflation, meaning their value rises as the general price levels for goods and services increases (known as Consumer Price Index or CPI). Other investments, especially bonds and similar fixed-income debt instruments, typically lose value as CPI increases.

Investing in real estate offers advantages during inflationary periods and a diversified portfolio offers strong and stable returns. As inflation rises, so do property values, so landowners will see appreciation. With the land inventory shortage so acute, owners have already seen their assets increase more quickly than at any time in recent memory. Timberland and farmland are a very good hedge against both inflation and economic downturns. Also, they can provide a continuous cashflow from leases and timber income, not to mention the tax benefits from holding these assets.

Pulse Results: December 2021

The LANDTHINK audience certainly had a strong opinion on what 2022 has in store for the land prices. The results showed some mixed views, but the majority of our audience (47.1%) believed that land prices would Increase Slightly, followed by 21.5% who believed land prices would Increase Drastically throughout 2022. Only (14.0%) held the opinion that land prices will Decrease Slightly. Some (11.0%) disagreed, expecting land prices to Decrease Drastically, and just 6.4% thought prices would Remain Unchanged.