Question to determine the real land value

Hello community,

due to the low mortgage rates, I would like to invest in a home. In the past, I have already looked at some used properties. After a viewing, I keep getting stuck on the same question.

The sellers always calculate for me that the land has a certain value based on today’s square meter prices.

Now I always wonder if you can simply apply that to today’s time.

Example: 40 years ago, the square meter price of the land was, for example, 300 DM. Today, at the sale, it is supposed to be 350€ euros. I always think that the land is the same as it was 40 years ago. In that time, if at all, the land was maintained and its value preserved.

Does this justify these price increases? I always think that the sellers just want to make a fortune.

How should one classify and evaluate this?

Regards ITFan

Unfortunately, reality is different.... what did a beer in the pub cost 15 years ago? 2.20-2.50 DM. Today the beer costs me 3€ and more. Last week, the cinema visit for two cost 27 € admission and another 10€ for popcorn and drinks. Back then you would have paid 80 DM for that... never ever.

A plot of land always gains value when land becomes scarce and the location is good.

The value of a plot depends on what a customer is willing to pay. If you are not willing to pay 300€, maybe someone else is. If nobody is found, the seller will have to reduce the price. As far as I know, there are no rules that dictate how expensive or cheap I have to sell my land.
We searched a long time in Karlsruhe and in the 20 km radius, and we found prices between 300 - 600€ per sqm. Since we did not want to pay that, we moved towards Pfalz and looked there. It is more rural and without S-Bahn connection. There the land only cost 100€ / sqm. There are places here where land prices are already rising so much because in 4 years an S-Bahn will stop there, that hardly anyone can afford it anymore. What do you think is the reason why many plots are sold but not built on? Plots in the right areas are a totally lucrative investment. The money is safe from speculation errors, you have something tangible in your hand, and maintenance costs are manageable. We talked to 2 landowners who had absolute dream plots. They did not want to sell because they knew the land would almost double its price in 3 years.

I think the same will happen to you if you don’t want to pay 300€. You only have 3 alternatives: buy and live with it, buy a smaller plot and build a duplex or townhouse, or move further away.

In the end, value is always defined by what someone is willing to pay. It’s no use to have a rare watch with an estimated value of 10,000€ if you don’t find anyone willing to pay that :D (That’s the problem of many collectors and their apparent treasures. I was again at the flea market this week, and was often surprised what price expectations some have. I want to buy it as decoration, I don’t care how old it is or where it comes from, but the sellers assume a higher value for their knickknacks ) :)

I mean, if the price doubles again in 40 years, it’s also a good deal for me :-) If? Well, more important to me in the end is that I get a nice home of my own and that my money doesn’t fall victim to the euro or some other crisis destroying its value. The house standing on the property is probably even more serious. I find the valuation extremely difficult here. We will probably bring in an expert. For the house from 1973, the seller wants an additional 140,000 €. The living area is 140 sqm. However, the pipes in the bathrooms need to be modernized as well as the bathrooms themselves. All the windows need to be replaced. The facade would have to be insulated + the other painting, flooring, and wall work. When it comes to the electricity, I’m not quite sure what the situation is with a 40-year-old house.