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Texas rural land rush pushes prices to record highs

Soaring sales of ranches and rural property in Texas in the latter half of last year were just a prelude to what’s happened so far in 2021.
Credit: Jake Dean / Dallas Business Journal
Soaring sales of ranches and rural property in Texas in the latter half of last year were just a prelude to what’s happened so far in 2021.

DALLAS — Soaring sales of ranches and rural property in Texas in the latter half of last year were just a prelude to what’s happened so far in 2021, according to a new report from the Texas Real Estate Research Center at Texas A&M University.

First-quarter 2021 sales of large acreage rural properties grew more than 37 percent statewide compared to 2020, said Charles Gilliland, research economist and rural land expert for the College Station-based research center in College Station.

First-quarter sales activity exceeded the high levels seen in the third and fourth quarter of 2020 in most areas, with West Texas leading the way with a more than 50 percent gain.

“In the aftermath of the COVID-induced economic lockdown, 2021 Texas rural land markets have exploded in a burst of activity,” Gilliland said in a news release.

The vigorous demand sent the statewide price 9.5 percent higher than 2020 prices to a record high at $3,251 per acre, he said.

“The unprecedented sales volume confirms reports of buyers flocking to rural environments during these uncertain times,” he said.

In first-quarter 2021, the Texas rural land industry posted a record annualized total dollar volume of $1.99 billion, up more than 38 percent with 612,699 acres changing hands.

“These developments mark one of the most active times in the history of Texas land markets as urban-based buyers seek out rural retreats,” Gilliland said. “The pandemic-inspired lockdown prompted a growing number of individuals to review their lives and seek out a more relaxed mode of living."

“Anecdotal reports from market participants have pointed to a desire to escape the problems faced by cities mired in political and social unrest,” he added. “In addition, some buyers seem to be concerned about governments’ ability to sustain its debt burdens.”

Sales by region

Breaking down first-quarter 2021 sales by region, activity in West Texas drove dollar volume up 103.97 percent with the number of sales up 53.28 percent. Bucking the trend, Far West Texas

sustained a sizable drop in activity, retreating 22.61 percent due to a sudden halt in purchases from the oil and gas industry.

In the Gulf Coast-Brazos Bottom and Austin-Waco-Hill Country regions, the number of transactions increased 48.34 and 39.81 percent, respectively.

The Northeast region, which includes the Dallas-Fort Worth area, grew 31.6 percent in sales volume. The Panhandle and South Plains had a sales increase of 17.76 percent.

Prices by region

The uptick in demand sparked price increases with the Northeast region’s prices rising 12.11 percent to $5,423 per acre. Prices in the Gulf Coast-Brazos Bottom followed suit, increasing 11.22 percent to $7,069 per acre.

In Central Texas, Austin-Waco-Hill Country prices rose 7.07 percent to $4,424 per acre. The abundance of West Texas sales saw regional prices grow by a modest 2.9 percent to $1,702.

South Texas prices held fairly steady, falling 0.35 percent to $3,950 per acre. Although volume expanded in the Panhandle and South Plains region, prices retreated, falling 4.68 percent to $1,120 per acre.

The Far West Texas region did not register enough sales to provide an accurate indication of price dynamics there.

Sales surge started last year

The surge in sales of countryside properties started last year.

There were 7,684 rural land sales statewide in 2020, which was up 28.9 percent from 2019. The increased demand sent statewide land prices up 3.1 percent to $3,064 per acre last year. The typical sale in 2020 was 1,139 acres.

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