This week's release of the Texas Small Land Sales Report by the Texas Association of REALTORS® shows a 14.2% increase in volume for 2016 while the average price per acre declined 0.3% year-over-year.
“As our state’s population continues to grow and the footprints of Texas cities expand, the demand for rural land will only increase,” said Vicki Fullerton, chairman of the Texas Association of REALTORS®. “At the same time, after consecutive years of rapid growth in real estate land prices, prices in many regions have leveled off.”
Statewide, 6,992 small land tracts were sold in 2016, with the Austin-Waco-Hill Country, Northeast Texas, and Far West Texas regions all registering sales volume gains of more than 20%. Only the West Texas region saw its sales fall year-over-year, with a 20.6% decline. The statewide average tract size fell to 36 acres, three acres less than in 2015.
Even as the statewide average price per acre dropped slightly to $5,647, only two regions marked an individual decline in average price per acre. Far West Texas saw a 64.9% decrease in average price per acre, but the region represents less than a percent of small land sales in Texas. The average price per acre in South Texas fell by 3.9%.
“While the Texas land market remains strong, multiple factors are impacting land sales activity throughout the state,” said Charles Gilliland, an economist with the Real Estate Center at Texas A&M University. “Rising prices of irrigated farmland and a sluggish agricultural sector are driving up land costs in the Panhandle, and residual effects of the oil and gas downturn have slowed small land sales activity in West and South Texas. Statewide, shortages in prime land are stifling land price growth as developers consider less desirable land tracts.”