Real Estate, the Answer to Rising Inflation?

The record real estate sales spurred by the Covid-19 Pandemic have had a significant impact on both the demand and prices of what is being dubbed “remote real estate”. The boom was in part due to buyers who were looking to escape big cities like New York and San Francisco for property in more “off the beaten path” places such as Montana. With technology like Zoom re-shaping the idea of the workplace, more and more buyers flocked to our state sending both demand and prices skyrocketing. While the interest from this category of buyers remains high, investors concerned about the impact of inflation have entered the market for premium Montana property.

Record Price Escalation

Steep increases in the price of consumer goods – the fastest increase in the last 30 years, and climbing interest rates have economists predicting continued market inflation. Supply chain disruptions, rapid consumer demand and rising housing costs combine to fuel the strongest inflationary rise in a generation. There is risk that price escalations are here to stay with some economists projecting that food and energy increases may exceed 7%. Concern over rising inflation and an unpredictable market has prompted high net worth individuals to diversify their portfolios, with many turning to real estate.

Historically, real estate has offered lower risk, strong returns with property values having a steady upward curve over time –  making it a good hedge against the predicted rise in inflation.  Typically a long term investment, remote land and real estate is becoming a short term investment for cash buyers fearing potential swings in the stock market.   With recent ups and downs in the S&P 500 and Nasdaq Composites, the appeal of investing in ranch property to balance and bolster stock portfolios becomes increasingly attractive.  This new class of buyers has only furthered the demand for land and ranch property in Montana, and with limited inventory, prices are soaring higher than ever.

Make no mistake about it. The Montana Real Estate market as a whole is at a height never seen before due to the economic, political, and social factors of the modern world. If a Seller is on the fence about whether to divest in his/her Montana ranch property, capitalizing on this market while it lasts is a great strategy.  Caleb Campbell, Partner/Broker

Seller motivation remains high as well, not only because of record breaking prices, but due to worry about potential changes in tax laws. Both buyers and sellers are looking to close transactions quickly, making the ranch real estate market one of the most competitive in decades. If you’re considering buying or selling a ranch in this fast paced market, Western Ranch Brokers has the experience and market knowledge to help you successfully navigate any transaction.

Ready to explore your options for purchasing your next property or finding out what your property’s current market value is? Whether you’re buying or selling, find out how we can go to work for you.