adv. & adj.
Very cheap: bought the property dirt-cheap; a dirt-cheap piece of property.
The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.
The term came into popular use in the 1860s when it replaced the term dog cheap. It denoted something that had no value, and therefore no price. In reality dirt (land) isn’t “Dirt Cheap”; it can have great value and can carry a high price. For example; in Haiti dirt is so valuable that Haitians will cross into the Dominican Republic to steal topsoil. And it was well known that Hitler stole train loads of Ukrainian black dirt to improve gardens in Germany. He knew more food would be needed to feed the people. While these are extreme cases of value, let’s examine the subject of value in dollars.
The value of land (dirt) tends to vary locally, regionally and nationally depending on its location, use, soil types and market conditions. For decades, land has been one of the most stable investments when compared to other types of investments. Wealth has been built on the ownership of commodity-producing land for generations. Land tends to hold its value through tough times and rebounds quickly when market conditions improve. Savvy investors see land as a hedge against inflation and with historically low interest rates have made it cheaper to purchase. According to a new survey published by The Land Report, more people are investing in undeveloped land and sowing the seeds of the United States’ economic recovery while protecting America’s greatest resource, the land. Data shows the private holdings of the top landowners have grown nearly 20 percent over the last five years.
Cropland, according to a USDA report in August, has increased in value 14.5% in 2012 and has shown double digit increases since 2005. The reason? Its ability to produce annual income and the worldwide demand for food. As the world population grows, so grows the need to produce more crops for consumption and fiber along with uses of crop by- products for manufacturing fuels, oils, livestock feeds, medicines, and plethora of other goods.
Timberland is another commodity producing form of land investment. For the last 25 years, the annualized return on timberland averaged 13% compared to the S&P 500 index return of 9.2%, as published in a study by the Hancock Natural Resource Group. With the world supply of timber-producing lands decreasing, the ever increasing world population will have to make do with less of this valuable resource. Timber, like crops, also has many uses from construction grade lumber to paper goods and energy production for manufacturing.
Even, recreational properties have held value when compared to other forms of real estate investments. Recreational land can also have the ability to produce income from farming leases, timber harvests and hunting/fishing fees, not to mention the value of being able to use the land for pure enjoyment which is “priceless”.
Land is a nonperishable commodity that has performed well through decades of good and bad times. So while land is not “Dirt Cheap”, it is in fact “a great place to invest for the future”.
J. Parker Sartain
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