|Texas Land Market Latest Developments||Texas Land Market Latest Developments||Charles E. Gilliland, Lynn Krebs, and Tian Su||2022-10-12T05:00:00Z||research-article||Land Markets|
About this Report
The Texas Land Market Latest Developments report contains an analysis of Texas land markets. The reported sales consist of a sample of verified transactions. The report does not include all Texas land sales. The statistics reflect a mixture of land uses and conditions and represent the market for large rural land tracts (the minimum land size is region-specific due to the varied tract sizes sold in each region). Statistics in the report reflect general trends without regard to land use or type. The analysis reports quarterly, annualized changes using moving averages as they generally minimize noisy, short-term fluctuations and provide a long-term indication of market trends. Median values are also reported, because they are the most stable representation of market conditions at any point.
Users should regard the statistics presented here as indicators of past market conditions providing a general guide to land market trends. The reported data do not represent prices or values of any particular farm or ranch. Users should not consider the reported statistics as a substitute for an appraisal or market study of current local sales regarding the value of any particular farm or ranch.
For historical data; data on Texas' Land Market Areas; and data for Louisiana, Mississippi, and Alabama, go to recenter.tamu.edu/data/rural-land. The link will also direct you to Texas Rural Land Value Trends, a regional analysis of Texas markets by the Texas Chapter of the American Society of Farm Managers and Rural Appraisers.
Annual sales volume slipped 26.54 percent to 7,326 from mid-2021 to 2022. Quarterly totals dropped from 2,710 in 2Q2021 to 1,822 in 2Q2022, a 32.77 percent slide. However, 2Q2021 was especially active with a 71.41 percent increase over the 2020 volume. This marks the third straight quarter in which the number of sales failed to match or exceed that of the corresponding quarter of the previous year. Clearly activity appears to be slowing. Nevertheless, 2022's quarter-only volume topped 2019 totals by 4.4 percent.
Demand for land, as reported by rural brokers, remains strong but has noticeably cooled from last year's frenzied contest. Some brokers report negotiations for terms short of asking prices have returned to the market. Still, there was an absence of properties for sale, and prices increased 24.48 percent to $4,286 per acre statewide. However, was less than the remarkable 27.12 percent increase posted in first quarter 2022. Total dollar volume ($3.6 billion) was up 28.02 percent over the 2021 total, down from a 76.79 percent increase in first quarter 2022 and a 97.61 percent increase in fourth quarter 2021.
A total of 850,469 acres changed hands, up only 3.67 percent over 2021, suggesting market activity has fallen to a more normal level at high prices. The typical size expanded 9.36 percent to 1,293 acres.
Prices increased by more than 21 percent statewide except in Far West Texas, where they fell substantially. However, total acres transferred declined in several regions, and total sales dropped everywhere but Far West Texas. This trend toward rising prices and declining activity suggests demand is dropping. If so, brokers may begin to find ebbing enthusiasm among potential buyers.
Second-quarter volume trends suggest continued cooling of the insatiable demand that has propelled prices and activity to record levels. Falling volumes across most regions suggest buyers have begun to resist current asking prices as second-quarter-only volumes fell well below 2Q2021 levels. However, 2Q2021 was active, and brokers reported a general lack of inventory. In addition, they see a slackening of demand in many areas. These conditions point to continued quick sales of good properties.
Inflation continues to plague the economy. The Federal Reserve's continued interest rate hikes have impacted housing markets and will have negative effects on land market prices and volumes. The Ukraine-Russia war continues to threaten food supplies while worldwide drought woes further darken the outlook for food prices. Many economists see a recession in the near future. In general, a pall of uncertainty smothers markets for all assets in the second quarter. However, such conditions often favor land investments.
To read the report in its entirety (including maps, figures, and tables for each Texas region), click Download PDF.
|Digital and Print||2268||https://www.recenter.tamu.edu/articles/research-article/TexasLandMarket-2268|| https://assets.recenter.tamu.edu/Documents/Articles/2268.pdf|