|Texas Land Market Latest Developments||Texas Land Market Latest Developments||Charles E. Gilliland and Tian Su||2021-03-29T05:00:00Z||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.
Fourth quarter 2020 produced a remarkable increase in transactions throughout most of Texas, expanding the statewide sale volume by 28.9 percent to 7,684 sales. Two regions posted more than a 38 percent increase in closed sales. This uptick in sales confirms reports that buyers are seeking country getaways and places to invest funds in uncertain times. The Far West Texas Region actually sustained a sizable drop in activity (25.1 percent) as purchase from the oil and gas industry came to a halt owing to the oil price collapse. The South Texas Region, where Eagle Ford oil play impacts the markets, had a muted 8.14 percent increase. Pushed by the uptick in demand, statewide prices increased 3.1 percent. The typical size fell 13.2 percent to 1,139 acres. Reflecting the strengthening market, the total dollar volume was a record $1.69 billion, up 17.6 percent. In all, 552,707 acres changed hands. These remarkable results reversed the pandemic-induced trend toward slowing markets and weaker prices observed in the second quarter. Taken together, the third and fourth quarter results signal an active and rising market with strong demand for land in most areas of Texas.
Prices expanded in all regions except for the Panhandle and South Plains. The West Texas and Austin-Waco-Hill Country Regions saw little price growth. However, they did experience remarkable increases in the number of sales. Only Far West Texas, impacted by falling oil prices, saw a sales decline. Transaction size fell everywhere except for South Texas. Total dollar volume retreated in Far West Texas, grew modestly in the Gulf Coast and Brazos Bottom but expanded robustly everywhere else.
The fourth quarter posted very strong results given the turbulence created by COVID. The unprecedented cessation of economic activity took its toll throughout Texas and the Southeast as numbers of transactions and total dollar volume contracted in the second quarter. Under normal circumstances, those negative developments on a broad front would signal weakened prospects. However, the economic environment has radically changed from the moribund second quarter. Currently, market professionals report a flood of interest in land purchases.
Nevertheless, the path forward remains cloudy. Many anticipated the pandemic's severity would have abated by late summer. Because that did not happen, conditions have forced potential buyers to revise their expectations. They worry about permanent layoffs, more bankruptcies, and evictions. In addition, the unrest in urban areas poses challenges for the future. Now, many see the current drive to vaccinate the world as the panacea anticipated for last fall. If the vaccines perform as hoped, the consensus is that the economy will see rapid growth. However, the new strains of the virus spreading across the globe threaten a second wave of infections this spring. If that happens, further turmoil awaits, leading to reduced economic activity. Either scenario promises to spark interest in rural properties, either as a long-sought recreational getaway or as a haven protecting owners from the urban turmoil. These conditions suggest increased demand for land and higher land prices. Developments in the next two quarters will show future market realities.
|Digital and Print||2268||https://www.recenter.tamu.edu/articles/research-article/TexasLandMarket-2268|| https://assets.recenter.tamu.edu/Documents/Articles/2268.pdf|