COLLEGE STATION – Competition for a limited supply of land for sale pits investors, developers, and end-users against each other.
Research Economist Dr. Charles Gilliland with the Texas Real Estate Research Center at Texas A&M University monitors the rural land market using a network of local observers. Here is a brief summary of those findings. Click here to read Dr. Gilliland’s full recap.
Austin-Waco-Hill Country: ‘Take a Number’
“If you want property in this region, take a number,” said Gilliland. “Brokers have buyers lined up.”
Strong demand has prompted active subdivision operations.Small properties sell within days of listing, he said. The frenzied demand includes both cropland and rangeland.
In ranch markets farther from Austin, current pricing is testing the top of the market. Typical buyers are wealthy individuals worried about inflation.
Panhandle, South Plains: ‘Record High Price’
“With buyers, mostly farmers, flush with cash from both government stimulus payments and strong commodity prices, sales increased dramatically in the second quarter,” said Gilliland. “Regional sales this year will exceed those of 2016, the previous record-holder.”
Abundant water in Hutchinson, Moore, and Sherman Counties prompted dairies to acquire land to provide feed for their operations. In addition, farmers are harvesting good crops selling at high prices.
Larger transaction have taken a puace, and the market for properties priced $20 million and up may be softening. Cropland sales slowed, but prices are steady or increasing.
He added that worries about inflation and tax law changes motivated many buyers and sellers. Current high prices have prompted more owners to sell.
Far West Texas: ‘Unrealistic Asking Prices’
“Oil and gas woes have dried up demand for large ranches in this region,” said Gilliland. “However, with oil prices climbing, oil companies’ activities are increasing.”
Although observers report an oversupply of land for sale at unrealistically high asking prices, he said, the latest transactions have been around $1,500 per acre.
West Texas: ‘Activity Exploded’
“Activity exploded in West Texas as buyers snapped up small, medium, and large properties,” said Gilliland. “Many subdivided the large properties, quickly selling the smaller tracts.”
Observers expect higher prices in the near future.
Northeast Texas: ‘Waves of Demand’
“Waves of demand in the Dallas-Fort Worth Metroplex meant strong activity in the region,” said Gilliland.
Because of a dearth of properties for sale, Gilliland said some markets had few sales. Observers anticipate an uptick in cropland sales.
“Sawtimber prices have increased 45 percent over the last year, while pulp wood prices have remained steady,” said Gilliland.
Gulf Coast-Brazos Bottom: ‘Dramatic Activity’
“Demand from the urban centers drove Coastal Bend land markets as buyers prepared for growth,” said the Center economist.
Progress on the “Aggie Expressway” from Houston toward College Station spurred dramatic activity in Grimes County as investors anticipated future development.
‘Short supplies of listings restricted sales activity in some areas,” he said.
South Texas: Divided, Sold
South Texas activity was marked by large properties, which were subdivided and quickly sold as smaller parcels. Duval and Live Oak Counties were especially active.
Read Dr. Gilliland’s full commentary here.
The Texas Real Estate Research Center has a wealth of economic information online for free.