In some cases, they're receiving an inheritance or a stock grant and are choosing to invest in their future real-estate needs rather than the stock market. In other cases, they're altering their expectations about how long they'll work and the kind of returns they'll earn on their nest egg in order to pursue an emotional investment.

Nevertheless, people who receive an inheritance or other cash infusion are often deciding to put that money into retirement real estate instead of stocks. Others are pulling some of the non-retirement-plan money from their nest egg. Either way, says Suzanne Krasna, a financial planner in Walnut Creek, Calif., the bottom line is to figure out if your income can support the additional liability of this house after you've met other obligations -- such as building an emergency savings account, contributing to a child's educational savings and fully funding your retirement plan -- and after accounting for your current lifestyle.

No one knows how many younger buyers are out snapping up their retirement homes. But real-estate agents and financial planners around the country say they're increasingly assisting younger buyers spending $100,000 to $500,000 for a house to call home in retirement. Partially at play is a cultural shift planners say they see among younger savers who aren't content to just accumulate assets to use in retirement. Instead, this younger generation wants to put some of its nest egg to work today as an investment in family.

Gregg Yaeger, a vice president at Chicago's Northern Trust Corp., says he has dealt with several younger clients doing this in recent years, including a 37-year-old client currently buying a retirement house on a lake in Michigan. "He wants this place specifically to retire," Mr. Yaeger says, "but he also wants it now as a place to build a bank of memories with his kids."

The question many people face is how to afford the future today. After all, beyond the price of the house there is maintenance, insurance, taxes and other costs. Phillip Cook, a financial planner in Torrance, Calif., says he discourages his clients from pursuing this strategy because "most of the rationale is emotional, and financially I think that's a mistake. Do you really think you know where you want to live 25 or 35 years from now?"

Younger buyers, however, don't necessarily see these homes as investments. They recognize that real estate has intrinsic value and that their retirement dollars remain at work in some fashion, since, if they do live in this house at retirement, they can sell their current primary residence to supplement their retirement savings.

Most, though, are like Anuraj Bismal, 40, and his wife, Ann. The pair pulled money from their nest egg and bought 38 acres and a 100-year-old farmhouse in far northeastern Pennsylvania, about 2½ hours from their Montclair, N.J., home because, after each seeing parents die in recent years, they've come to the conclusion that "the moment is now," says Mr. Bismal, a financial executive with a major Wall Street firm. So, the Bismals spend most weekends at their Pennsylvania house, and Mr. Bismal expects they'll spend part of every year in retirement there. "I could care less if I make $1 on this place," he says. "For me, this is very basic: I want to live my life now."

The sense is that the market is in a position for investors to repeat the real estate land grab of the 1980’s – instant riches from quick flips of raw land bought from the government at fire-sale prices.

According to Mike Bryant, a Dallas-based executive with Capmark Financial Group Inc., a California real estate finance company, “Some $300 billion or $400 billion in investment dollars could become available worldwide. There’s about 300 to 400 different funds being put together that are ranging in size from $25 million to $1.5 billion, and even up, who are going to get in there and bid on these assets”.

And these assets are being bought for pennies on the dollar. Take for example the $30.6 billion portfolio of mortgage-backed assets that Merrill Lynch & Co recently sold to Lone Star Funds for a mere $6.7 billion. Or the $22 billion mortgage portfolio that Black Rock purchased from UBS for $15 billion, with the assistance of the Teacher Retirement System of Texas, a pension fund with more than $100 billion in assets.

People nearing retirement age have been prowling for 100-acre properties and smaller, said Charles Gilliland, research economist with the Real Estate Center at Texas A&M University. That's helped lower the average acreage involved in a land sale. But at the same time, real estate agents say some high-dollar investors are looking for a stable place to park their money for a few years, and the have zeroed in on land — lots of land. Both the boomers and the big-money investors have driven prices higher.

But now, both groups of potential land buyers are, to a large degree, on the sidelines watching the stock market and the presidential election. Land has long been used as a shelter from inflation and an investment to turn to during difficult times, but it isn't immune from the economy's gyrations, economists say.

Nevertheless, people who receive an inheritance or other cash infusion are often deciding to put that money into retirement real estate instead of stocks.

Others are pulling some of the nonretirement-plan money from their nest egg. Either way, says Suzanne Krasna, a financial planner in Walnut Creek, Calif., the bottom line is to figure out if your income can support the additional liability of this house after you've met other obligations -- such as building an emergency savings account, contributing to a child's educational savings and fully funding your retirement plan -- and after accounting for your current lifestyle. http://www.bluegreencommunities.com/the-good-life/

Quite frankly, everyone is getting in on this latest land rush in the U.S. From retirees looking for a place where they can spend time with their grandchildren to the young couples that wants to live their life now to investors looking ready to plunk down cash for troubled properties. The bottom is in site and the investors are vulturing above to pounce on distressed assets. But they are not the only ones.

Wealthy individuals, pension funds, hedge funds, endowments, retirement systems, schools, International buyers, Baby Boomers and even first-time buyers are all getting into the act.

• Retirees

• Younger Couples

• Investors

• Baby Boomers

• Wealthy Individuals

• Institutional Funds

• International Buyers

• First-time Buyers

The three key factors were simple. Texas is:

1. A Great Place to Live

2. A Great Place to Work

3. A Great Place to Invest

Dave Winans has put together this excellent video that goes into more detail about why Texas is such an ideal place to buy land, and why NOW is the time to do it. Enjoy!

According to Winans: "The combination of Texas’ economic conditions, geographical location, natural resources, infrastructure, political conditions and even the weather have created a perfect storm of opportunity and growth that is greatly outpacing the rest of the nation. Even in a time of national recession Texas holds strong and continues to be the fastest growing state in the nation.

Because of such stability and growth businesses and individuals are flocking to Texas. Of the 24 million people living in Texas 4 out of 5 live within a the triangular region made up of Dallas/Fort Worth, Houston, San Antonio and Austin… we call it the Texaplex.

By the year 2030 forecasts show that we will add an additional 14 million people to the Texaplex. That’s the equivalent of adding another Dallas / Fort Worth, Houston, and Austin… all within the Texaplex!" David Winans makes excellent points about why Texas is such hotbed for growth.

The time to buy land in Texas certainly appears to be right now. In future posts we'll continue discuss the best places to buy land, and why now is such a great time. Stay tuned.

Both sales and selling prices of vacation homes fell in 2008, according to member survey data from the National Association of Realtors (NAR) released this week.

Sales of existing and new vacation homes dropped almost 31 percent to 512,000 in 2008, from 740,000 in 2007 and a high of 1.07 million in 2006. Sales of primary residences declined about 13 percent, from 4.34 million in 2007 to 3.77 million last year.

The median price of a vacation home was $150,000 in 2008, down 23 percent from $195,000 in 2007 and from the record $204,100 in 2005. About 75 percent of 2008 vacation-home sales were located in small towns, rural areas and resorts. Almost 70 percent of vacation housing bought in 2008 were existing homes, and 70 percent were detached single-family structures. Forty-five percent were in the South, and only 15 percent were in the Midwest.

NAR’s analysis of U.S. Census Bureau data found 8.1 million vacation homes nationally, 40.5 million investment units and 75.5 million owner-occupied, principal residences last year. NAR classifies both vacation homes and investment properties as second homes. Trends like these — vacation-home sales down by about half and median price off by about 25 percent in a few years — usually bring buyers into the market. That is, except when buyers are scared stiff and “mattressing” their remaining cash.

The typical vacation-home buyer in 2008 was 46, but 27 percent were under 35 and 31 percent were over 55. Some younger folks are buying for investment and family reasons, while older folks are looking for transitions into retirement housing. Almost 80 percent of vacation-home buyers reported household income of more than $75,000, with the median at $97,200. Sixty-four percent came from two-income households. Some 80 percent of all vacation-home buyers thought it was a good time to buy in 2008.

A vacation property that can be purchased at 30 to 50 percent less than its 2006-2007 asking price is worth serious thought as an investment. While sales and prices of primary housing and vacation homes were sliding into the pits, values of agricultural lands were going up. Average U.S. farm real-estate value, which includes buildings and improvements, increased from $2,160 per acre in 2007 to $2,350 in 2008. Crop land rose from $2,690 to $2,970 per acre, driven by demand for corn-based ethanol. Pasture rose from $1,160 to $1,230 per acre. Agricultural land prices have risen steadily for the last 20 years. The USDA recently posted 2008 land values.

Farm values in 2008 declined only in New Hampshire, Vermont, Connecticut, Rhode Island, Maryland and Delaware. While USDA is projecting a decline in U.S. net farm income in 2009 from about $89 billion last year to perhaps $66 billion, the Department found “the projected decline in farm income in 2009 is not expected to have much effect on national agricultural land values.” (Economic Research Service, USDA, The 2008/2009 World Economic Crisis: What It Means for U.S. Agriculture, WRS-09-02, March, 2009) Farm values are projected to slip by only two percent in 2009 in USDA’s model despite the projected $23 billion loss in agricultural income. Long-term expectations of returns drive farm real-estate values, and these are relatively stable and have trended up.

Farm values rose 12 percent annually for the five-year period, 2004-2008. USDA is projecting a five-year rise of five percent annually. Cash-flow problems will force some farm properties on the market in the next few years, as much as I dislike saying so. Buyers will have opportunities to make long-term investments that are more profitable, less risky and more tax-friendly than stocks, bonds and Madoffs. Country property is broader than farm land. It includes small-town housing, undeveloped and recreational land, timberland, hobby farms, second homes, mineral properties and conservation tracts. Trends in sales and prices for these categories are often better understood regionally than nationally.

The value of timberland, for example, has held its own in much of the South but fell in the North and Northeast. Demand for high-quality northern hardwoods used for flooring, furniture and cabinetry has tracked the decline in new home construction. Southern wood products are less-construction dependent. Buyers should be able to find pretty good timberland tracts (without minerals) for $900 to $1,500 per acre in Pennsylvania and for less than $1,000 in upstate New York. For large-lot second homes, timberland in northern-hardwood areas may be a better value than adjacent farmland. Most country-property purchases are discretionary. Buyers can postpone them, even forget them completely.

Sales of these properties, however, are often forced by the economic vise that is squeezing everyone today. Knowledgeable buyers look for “motivated” sellers, which is a polite way of saying, sellers in a jam. Knowledgeable sellers in a pinch don’t blow off low offers. They work knowledgeable buyers toward a “reasonable” price and make the deal because their alternatives are worse. Several hundred billions of dollars were rescued from the stock market’s death spiral during the last year.

Buyers who think like investors might use some of this to pursue either marginal small farms and discounted woodlands for second homes or the hammered vacation properties – on the beach, in the mountains, along a lake — that NAR reports are still in the eye of the storm.

If you already own other real estate investments, you can use a 1031 exchange to acquire land, says Brownfield. These exchanges permit real estate investors to trade one real estate holding for another but deter any capital gain taxes until the second asset is sold. (Note that 1031 exchanges have stringent rules, so consult an expert when considering an exchange.)

Another ready source of funds for land purchases is a ROTH or SEP IRA. IRS regulations permit individuals to use retirement funds to purchase real estate, including land, through an IRA custodian that offers real estate investments along with stocks and bonds. “Several of my investors have contacted me recently to thank me for suggesting they diversify their retirement accounts into land holdings,” says Lou Jewell, ALC of Dan River Real Estate Inc., in Pilot Mountain, N.C. “Others have told me that they wish they’d diversified before they lost their money in the stock market.

I tell those people that it’s not to late to invest in land. There are still great opportunities today.” But while there is almost certainly a land investment to fit any investor, finding the property that fits each individual’s goals requires expert knowledge and experience. That’s why the smart first step in making any land purchase should be consulting with a professional land broker, preferably one that holds the Accredited Land Consultant (ALC) designation from the REALTORS Land Institute (RLI). The ALC designation is conferred only on those land specialists who complete a rigorous education program and achieve a volume of successful land transactions, says Dan Hatfield, ALC, 2009 RLI president-elect and owner of Hatfield Realty in Medina, Texas.

As a professional membership organization, the REALTORS Land Institute serves the unique constituency of real estate professionals who broker, lease, sell, develop, and manage land assets. RLI offers superior education through its RLI Land University and professional development programs, an array of services that encourage networking and referral opportunities, and legislative advocacy on land-related issues through the National Association of REALTORS?. “One of the real benefits of the REALTORS Land Institute is that whatever type of land you’re seeking, there are RLI members who are expert in that area,” says Gibson. “Whether your interest is shale oil leases, timber, or ranches, RLI members have the knowledge and resources to find the answers.”

• Land is the investment vehicle of choice for 2008 and 2009.
• According to the USDA, there are 2.2 billion acres in the United States. Of the total amount of land, 1.6 billion acres can be bought and sold.
• 97% of the United States is designated as rural land

What the experts are saying In yet another blog post I read on LandThink.com, “The demand for land will continue to be strong in the next few years especially compared to other forms of real estate. In fact, the major media is reporting a strong, positive message in recent articles about land.”

The article went on to site the several recent media stories about the reasons to buy land now. Below are some of those compelling sources:

LANDFLIP.com conducted a poll asking “When are you likely to purchase land? 73% responded said they plan to purchase land in the next 12 months!”

New York Times article claims, “The real estate market may have cooled, but investor demand may soon be heating up for at least one type of property: land. The time is ripe to start looking; I haven’t seen this market in 20 years.”

Bloomberg.com claims, “Farmland is having its biggest revival in almost 30 years as demand for corn and soybeans from Asia and the ethanol industry drive commodity prices to record highs. From Iowa to South Dakota to Wyoming, gains in rural land prices have ranged from 78 percent to more than 200 percent.”

New York Times again predicts, “‘Farm values probably will rise at an annual rate of 6 percent to 10 percent in the next five years,’ said Murray Wise, of Westchester Group Inc. manager of $550 million of global farm tracts. In comparison, the median U.S. home is forecast to gain 1.2 percent through 2010, the Mortgage Bankers Association in Washington said.”

DailyWealth.com said “Timberland has actually beaten the stock market since 1960 (as far back as data goes). Stocks did extremely well in that time… up nearly 12% a year. But the total return on timberland was even better, at nearly 14%. Another nice thing is timber is completely uncorrelated to the stock market. It makes sense… the trees have never heard of the Nasdaq bubble… and they don’t know what a War on Terror is.”

Smart Money Magazine recently posed the question of “What To Do With $100,000?” And the conclusion was to “put money into real estate — yes, even now. With all the Sturm und Drang over the housing market, it's easy to forget that real estate still presents the opportunity to purchase a valuable asset for what amounts to pennies on the dollar, greatly magnifying the return on investment.”

The article went on to say, “There's another way to sidestep the volatility of the housing market: Forget about a house, and buy land. As the old saying goes, they aren't making any more of it. The house is what deteriorates over time. It's the land that appreciates," says Morris Davis, a real estate professor at the University of Wisconsin who has studied land values.

ABC News recently featured Donald Trump where he spoke about the current market. He claims that “there has never been a better time to buy, and smart buyers can use this to their advantage by pursuing real estate in prime locations at reduced prices.”

The Land Report cites in a recent survey of potential buyers that of their subscribers, “64 percent plan on buying/selling land in the next 5 years. And that 53 percent purchased land in the last 5 years.

All these expert opinions lead to one conclusion. It's simple - now is the time to buy land.

[Source: http://www.whybuylandnow.com/2009/06/land-factsland-facts/]