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Land at Williams Lake - Then and Now
On my 3rd birthday I was probably fighting with my brothers down in Brownsburg while Rex Schrader was selling the first multi-parcel real estate auction in Indiana. Last night, after 30 years, RD and I managed another auction of what was sold as Tract II back in 1978.
Back then Rex was selling 450 acres for the Estate of Dale B. Poyser in the first example of multi-parcel bidding in Indiana. He had a computer at hand with custom software to help with the calculations of the six tract auction. The land is located just east of Wolf Lake, Indiana and touches several lakes including Williams, Poyser, Marl, and Deep Lake. On that day, Tract II was sold individually for $640 per acre, a fair price at the time.
Last night that same parcel of land was sold for approximately $5,150 per acre to two buyers, representing an 800% appreciation in land over the intervening 30 years. That works out to an annual appreciation of approximately 26%. In the same period, the Dow Jones Industrial Average has gone from roughly 800 to 12,600 giving an annual gross return of 52%. What should be considered when comparing the two are what impact the farm/timber income, real estate taxes, and — intangible — enjoyment of the setting for fishing and recreation would have.
Regardless it is fair to say that this parcel has been a good investment.
Update: Ironically, I ran across this blog post today on LandFlip: Stocks vs. land: Which is the better investment?
written by Kevin in investing, land