What Is Timberland Worth: F2M Market Watch Poll Results

A few weeks ago, I posed the question, what is timberland worth?  I spoke about my experience on a recent beach vacation and the depression in rental property prices and my view that it seemed like prices had returned to the same levels as 2003.  I related this experience to the timberland market, which experienced something much like a real estate “bubble” of sorts between 2005 and 2007.

Given the decline we’re seen in number of timberland sales in this depressed market, I wanted to ask my readers what they thought.  And boy, did they think!!  We had over 500 responses.

Some bristled, thinking that I was leading the market on a downward spiral by suggesting the market should be lower than it is.  Others were very thoughtful and completed their own analysis before answering the poll.  And still others provided their local experiences.  The poll participants were asked to what level did they believe timberland prices would return: 1977 prices ($500 per acre); 1990 prices ($350 per acre); 1995 prices ($700 per acre); 1998 prices ($1,000 per acre); 2006 levels ($1,500 per acre) or current levels ($1,350 per acre).  These results of the poll are telling.

From the poll results, the respondents were about equally divided between pessimists and optimists.  Almost half the respondents (48%) said prices would stay the same or seek higher levels, while 52% of you said prices would continue to slide.

There is certainly a contingent of contrarians – 24% of you - that believe prices will decrease to or below $700 per acre and a lesser amount (18%) that believes prices will seek all time highs.

Ultimately, the price level timberland will seek is almost entirely dependent on the recovery in the housing market and general economy as well as access to credit and inflation.  According to our timberland manager customers, there is no lack of capital to invest and the competition from other investment vehicles is low.

Also, this is not a scientific poll, but judging by the respondents, many of who left detailed comments, I can tell you that the respondents did include some of the best and brightest in the industry – so we might call it quasi-scientific.  Thanks for participating in the poll and thanks for your interest in Forest2Market.

Comments

jim mangham

07-21-2011

is this poll regarding the price of dirt only ?

Comments

David Baird

08-02-2011

Thanks for sharing the results. I find it hard to believe that very many acres will change hands at the lower values (24% of respondants). I think most of those acres will be destress sales. Just like timber inventory, in most cases land can be held until the market improves.

Comments

Henry Werko

08-03-2011

Are we talking bareland values?  Are we talking upland only with no swamp?