After spending 40 years in the agricultural lending business, a Kansas appraiser realizes he can’t predict the future when it comes to banking and real estate. Certain principles come to mind when working with real estate and banking. The first one is dealing with real estate, a concept referred to as the economic principle of anticipation.
“The truth is I don’t know. I don’t know anybody that does know,” CoBank appraiser Keith Crow told the (Dodge City, Kan.) High Plains Journal. “Everyone that’s got up and talked on what’s going to happen in the future — most of them were wrong from what I’ve seen.
“Someone buys a house for example, for shelter; or someone buys a farm or commercial property for the benefit of future income,” Crow added. “And the future income deal today, I think you’re seeing it a lot where you have a property that comes up next to an operator for example, they have to make a decision whether (it could be) a benefit for in the future.”
The second thing to consider is principles of change.
“Agricultural land is changing all the time. We’re doing things, we’re seeing things, that I never dreamed of,” Crow told the paper. “I can get in the car and head south out of Wichita and I can go a long ways in Oklahoma and there is wind farm after wind farm, after wind farm. I never believed that 40 years ago when I was starting out.
“The way we operate farms, big machinery and how fast we can do it. And how efficient we can do it,” Crow added. “That is a change I’ve observed, and that’s a change that really has taken a big impact in the last 10 years. Technology changes and how people get news to make decisions have an effect on what happens in real estate.”
Crow also said that early in the year, declining commodity prices pushed farm income down, while recent reports have land prices down 10 percent across Kansas.
“I have no idea what’s going to happen in the future. I do think it’s going to be challenging, especially with the commodity prices we’ve got,” he said. “But how long will that last? I really don’t know.”