MOUNTAIN LAND & TIMBER PRICES 7/10/11

We are often asked about mountain land & timber prices here in the North Carolina mountains.  There are actually 3 different aspects to this discussion: 1) land, 2) timber, and 3) land with timber.  Mountain land & timber prices when combined – that is, marketed as a package have two different price points.

The first is the price a private individual or family would pay because of the aesthetic value of a property that is generously covered in mature timber.  This is usually the highest price point since individuals most often purchase such a property based on emotion.  The other price point is that paid by a timber company – and is usually much lower.  This type buyer wants to pay as little as possible in order to maximize the profit from the timber - and the resale of the land.

When you separate mountain land & timber prices, you encounter two additional price points.  For example, a buyer interested in only the timber (and not the mountain land) wants to buy at a cheap price, and often negotiates hard in order to do so.  Thus, timber that may be re-sold for $300/thousand board feet may be bought for only $225/m.

Conversely, once the timber has been cut from the mountain land, it is quite unappealing in its naked state.  As a result, although it may have sold for $4,500 per acre with the timber, it now brings only a dimunitive price of $1,800/acre.  A landowner who needs the cash flow and decides to sell only the timber, is likely to learn the penalty later when buyers shy away from a property stripped of its aesthetic value.

A recent article at Land Think.com tends to support these thoughts on the mountain land & timber prices discussion.  In summary, there is no set method to determine the best combination of price when it comes to mountain land & prices.  The land marketplace will do that.  Remember the old saying that “them that’s got the gold sets the price!”  In the end, sellers set the asking price, but buyers set the final sale price.