Booming countryside sales that marked the third and fourth quarters of last year were just a prelude to what’s happened so far in 2021.
“In the aftermath of the COVID-induced economic lockdown, 2021 Texas rural land markets have exploded in a burst of activity,” said Dr. Charles Gilliland, research economist and rural land expert for the Texas Real Estate Research Center at Texas A&M University.
“First quarter 2021 sales of large acreage rural properties grew more than 50 percent in West Texas and 37 percent statewide compared to 2020,” said Gilliland. “First quarter activity exceeded the remarkable levels seen in the third and fourth quarter of 2020 in most areas.
This vigorous demand has sent the statewide price 9.5 percent higher than 2020 prices to a record high at $3,251 per acre. This unprecedented sales volume confirms reports of buyers flocking to rural environments during these uncertain times.
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,” said Gilliland. “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. In addition, some buyers seem to be concerned about governments’ ability to sustain its debt burdens.”
Sales by region
Activity in West Texas expanded driving dollar volume up 103.97 percent with the number of sales up 53.28 percent. 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 grew 31.60 percent in sales volume. Even the Panhandle and South Plains had a sales increase of 17.76 percent. Bucking this 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.
Prices by region
The uptick in demand began to incite 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 remained steady, retreating 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.
Funded primarily by Texas real estate licensee fees, the Texas Real Estate Research Center was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public. The Center is part of Mays Business School at Texas A&M University.
Note: The information above is provided by Texas A&M University’s Texas Real Estate Research Center in College Station.