Higher mortgage interest rates are slowing overall real estate sales growth across the country. But one pillar in the market isn’t slowing down at all: high-end ranch real estate is still a hot commodity.
“Overall, demand remains extremely high for high-end ranch property,” says Hunter Harrigan of Harrigan Land Company. “There is still an abundance of buyers and limited supply, keeping prices very high.”
Cash buyers not impacted by higher rates
And, Harrigan notes, the vast majority of ranch property investors are cash buyers. The high-end ranch market isn’t feeling the pain from interest rates that have risen steadily for the last 18 months.
“Sincerely,” Harrigan says, “There’s been little to no effect from high interest rates.”
Cash buyers are obviously more appealing customers for ranch real estate sellers. And, for investors, ranch property remains one of the safest, most appealing investments available to them. Equity is rising, and a tight inventory is an incentive for potential investors to move quickly when property becomes available.
As Mark Twain once famously said, “Buy land. They’re not making it anymore.”
Legacy property market continues to grow in value
The overall real estate market just got a bit of a bump with mortgage interest rates falling slightly in November. That may open up the ranch real estate market to even more potential buyers who are willing to carry a mortgage.
But, as Harrigan noted, the high-end ranch market is almost solely driven by motivated cash buyers looking for homes and acreage. These larger “legacy” properties are great places to park money. Equity growth provides dependable passive income, and cash buyers aren’t constrained by the burdens that come with mortgage debt.
If you’re giving serious consideration to selling, but have been deterred because interest rates have lifted off in recent months, don’t. With low inventory and an investor market flush with cash, now is a good time to contact your broker and talk about listing your ranch.
If you’re a potential investor who might be waiting for rates to drop, consider that you’re likely up against a cash buyer when you look at ranch real estate as an investment. With the recent dip in rates, now may be a good time to make an offer on ranch property that’s caught your eye.
Yes, the overall real estate market has cooled with rising interest rates. But, for cash buyers without the need for a mortgage, large ranch properties remain a very attractive investment. And, unlike much of the real estate sector, the ranch real estate market hasn’t cooled off at all.
For potential investors, last month’s slight dip in mortgage interest rates might offer the incentive to make an offer. Understand, though, that you’ll be up against cash buyers. It might pay to be aggressive and make a competitive offer right away.