Companies from Bozeman to Billings have seen an uptick in investing in working ranches. Cattle prices are good and the prospect of the global world developing a stronger middle class only speaks of the demand for cattle to increase in the future. Grey Fay, a Bozeman-based real estate businessman, “sees the interest in ranch purchases as a play by American billionaires to add a tangible, low-return investment to their portfolios with the idea that land values have bottomed out and could appreciate considerably in the future.” (http://billingsgazette.com/news/state-and-regional/montana/ranch-sales-rise-as-wealthy-investors-put-cash-in-land/article_c0b70ee3-2e86-5a23-83f3-81e1eb281b5a.html)
Seeing the investment:
In 1972, a ranch could sell for $36/acre. In 2011, that same land sold for $500/acre. Even accounting for the inflation of the dollar through history, the land has doubled in value. Amenities on ranches extend beyond the utilitarian use of the land. Wildlife habitat, fishing, scenic views, and other nontangibles are spiking in value on top of the solid financial endeavor of running a ranch. Few investments are as secure as property and few property investments are as secure as one with the multiplicity of profitable uses as a ranch.
How does this inform Montanan values?
Places to hunt, fish, spend quality and semi-isolated time with family and friends are all strong central values of Montanans at large. With the city centers of Montana growing rapidly, the return to where Montana started speaks of how deep these important land and family ethics run. Time on a ranch is hard work and togetherness.
Trusting this strong market entirely is a bit naïve so those monitoring the market ought to remain skeptical. Fay sees ranch prices as bottomed out, but not yet appreciably rising making this moment in time as a good time to buy. Tomorrow, who knows… All that can be said is that there are “excellent opportunities everywhere right now.” (http://billingsgazette.com/news/state-and-regional/montana/ranch-sales-rise-as-wealthy-investors-put-cash-in-land/article_c0b70ee3-2e86-5a23-83f3-81e1eb281b5a.html)