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Bob Meyer

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Undeveloped, Arid Land Parcels Now Hot Property

In the barter industry, undeveloped land that has no water, electricity, sewers, roads and other amenities is referred to as “currency land,” meaning it’s used for trading rather than actual use. And the buyers (traders) certainly are aware of such caveats.

Such isn’t the case in the cash world these days, according to a recent report on land selling in West Texas near the Rio Grande and the Mexican border in Jeff Davis County. The land is sandy and bleak, full of gullies and rattlesnakes.

Yet in February, a Californian bought 7,408 acres for $65 an acre. He promptly sold them in small chunks to some people and in big chunks to others. Some of these buyers quickly resold to others, who resold to still others. The pieces kept shrinking while the prices went higher.

Buyers are now paying as much as $800 an acre, 12 times the cost six months ago. Nearly all the sales for the raw, undeveloped land, were bought over the Internet or at seminars by people from California, Florida, New York and other places where the cost of homes has been surging.

After four years of real estate mania, the message has sunk in widely and deeply. Land is good. More land is better. Land will always increase in value. Every moment you don’t buy you’re losing money. No need to see it before buying!

Why are buyers unfazed and not asking questions about the condition, accessibility, or even the location of the land?

One theory is that the buyers are looking for a greater fool to purchase the land from them before the bubble bursts. Another possibility is that they merely want to be able to brag at their next dinner party that they own a ranch in Texas.