Texas Rural Land-Buying Frenzy Wanes
published on October 26, 2022
The rural land frenzy Texas experienced during and post-pandemic appears to be waning. According to Texas Land Market Latest Developments by the Texas Real Estate Research Center at Texas A&M University, rural land sales volume in Texas dropped 26.5 percent from mid-2021 to mid-2022.
TRERC Research Economist Dr. Charles Gilliland said, “Clearly, activity appears to be slowing. Demand for land, as reported by rural brokers, remains strong but has noticeably cooled from last year’s frenzied contest.”
Gilliland said that purchase offers below asking price are beginning to appear in some markets, which has not been the case since the third quarter of 2020. However, with fewer properties for sale in the second quarter of 2022, prices still increased by 24.5 percent to $4,286 per acre statewide. Total sales volume for the second quarter was up 28 percent to $3.6 billion, compared with a 76.7 percent increase in the first quarter of 2022 and a 97.6 percent increase in the fourth quarter of 2021.
“A total of 850,469 acres changed hands,” said Gilliland, “up only 3.67 percent over 2021, suggesting market activity has fallen to a more normal level at high prices. The typical transaction expanded 9.4 percent to 1,293 acres.”
Statewide, prices were up more than 21 percent. Far West Texas experienced a decrease in prices. Total acres that sold were down in several regions, and total sales dropped in all regions except Far West Texas.
“This trend toward rising prices and declining activity suggests demand is dropping,” said Gilliland. “If so, brokers may begin to find ebbing enthusiasm among potential buyers.”
In the Austin-Waco-Hill Country region, prices were up 39.47 percent to $6,647 per acre, while total dollar volume was up 12.56 percent to $865 million. Transaction size was somewhat neutral, with a two percent increase to 216 acres. The total number of sales declined 29.13 percent to 2,109 transactions, and the total acres sold declined 19.29 percent to 130,139 acres.
The report suggested “continued cooling of the insatiable demand that has propelled prices and activity to record levels.” However, it stated conditions still point to “continued quick sales of good properties.”
Read the complete report here.
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