TEXAS
SMALL LAND SALES REPORT
2017 Edition
TEXAS SMALL LAND SALES REPORT | 2017 EDITION ABOUT THE TEXAS SMALL LAND SALES REPORT The Texas Small Land Sales Report analyzes small land sales data and trends across seven regions of Texas utilizing survey data aggregated by the Real Estate Center at Texas A&M University. The Texas Association of REALTORS速 distributes insights about the Texas housing market each month, including quarterly market statistics, trends among homebuyers and sellers, luxury home sales, international trends, and more.
ABOUT THE TEXAS ASSOCIATION OF REALTORS速 With more than 110,000 members, the Texas Association of REALTORS速 is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS速 and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more. MEDIA CONTACT Hunter Dodson Pierpont Communications hdodson@piercom.com 512.448.4950
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
REPORT SUMMARY The latest edition of the Texas Small Land Sales Report showed strong gains in small land sales volume as well as a slight decline in small land prices statewide in 2016. Rapid population growth throughout Texas continues to drive a strong demand for land, particularly around major metropolitan areas as increased urban sprawl drives the need for development and housing. As in past years, Texas small land sales also continue to be driven by ongoing farm and ranching activity as well as demand for recreational and retirement properties in various regions throughout the state. Annual growth of small land sales volume and average price per acre varied across the state’s seven regions in 2016. Far West Texas, Northeast Texas and the Austin-Waco-Hill Country regions each experienced annual small land sales gains of more than 20 percent. Conversely, West Texas was the only region to experience a decline in small land sales volume during the same time frame.
In 2016, the price growth for small land acreage in Texas was slowed by an ongoing normalization across the statewide real estate market, as market activity realigns with long-term historical growth trends after multiple years of aggressive growth. On a regional level, however, land price changes varied widely depending on the availability of prime land and changes in land use costs and industry activity specific to each region. The Panhandle & South Plains, for example, experienced double-digit land price gains due to rising irrigated farmland costs and an uptick in oil industry activity. Greater demand in Texas also meant smaller land tracts were sold in 2016. The average tract size for Texas small land purchases declined three acres from 2015 to 36 acres. In most regions, the average tract size for small land purchases hovered around 20 acres.
TEXAS LAND
REGIONS
REGION LIST Region I: Panhandle & South Plains Region 2: Far West Texas
Region 3: West Texas Region 4: Northeast Texas Region 5: Gulf Coast – Brazos Bottom Region 6: South Texas Region 7: Austin – Waco – Hill Country What Defines a “Small Land Sale”? The definition of a small land sale varies from region to region. The Real Estate Center at Texas A&M University (Real Estate Center) generally defines a small land sale as a land purchase of 200 acres or less. The exception is Far West Texas, in which 500 to 8,000 acres qualifies as a small land sale. Region maps created by the Real Estate Center at Texas A&M University
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
STATEWIDE
OVERVIEW
Texas small land sales continue to be one of the highestperforming and fastest-growing segments of the Texas real estate market, with small land sales increasing 14.2 percent from 2015 to just under 7,000 small land purchases statewide in 2016. At the same time, the Texas real estate industry is experiencing a normalization of market trends. In both residential real estate as well as land sales activity, market trends are slowing from the aggressive growth seen from 2013 to 2015 and realigning with long-term, historical growth trends. This normalization of the market led to a slight decrease in the average price per acre in small land sales in 2016. The average price per acre of small land purchases in Texas declined 0.3 percent from 2015 to $5,647 per acre. Greater acreage demand in Texas also meant increasingly smaller land tracts were sold in 2016. The average tract size for Texas small land purchases declined three acres from 2015 to 36 acres. In most regions, the average tract size for small land purchases hovered between 18 and 20 acres. The exceptions were the Panhandle and South Plains and Far West Texas, where the agricultural and ranching industries that drive most land purchases require a higher volume of acreage.
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
STATEWIDE
OVERVIEW Average Price Per Acre for Small Land Purchases in 2016 by Region
The average price per acre for small land purchases varies widely across the state, with higher per-acre prices occurring in regions containing major metro areas such as Austin, Dallas-Fort Worth and Houston. Combined with close proximity to the Houston area, the high market value of coastal property made land values in the Gulf Coast-Brazos Bottom among the highest in the state. Conversely, the sparse population and development activity in Far West Texas made small land costs in that region among the lowest in the state. Growing shortages of prime land are affecting small land sales activity across the state. In some regions, land buyers are paying less for larger acreage tracts of less-desirable land tracts, such as those which require more development or are not ideally located. Industry developments also led to varying levels of land price growth across Texas. Rising prices of irrigated farmland are driving up land costs in agriculture-heavy regions, while residual effects of the oil and gas downturn are curbing small land sales activity throughout West and South Texas.
$2,374 Panhandle & South Plains
$1,318 Far West Texas
$3,125 West Texas
$8,315 Northeast Texas
$10,182 $8,407 Gulf Coast – Brazos Bottom
South Texas
$8,684 Austin – Waco – Hill Country
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
STATEWIDE
OVERVIEW
More populous regions such as Gulf Coast-Brazos Bottom, Northeast Texas and Austin-Waco-Hill Country made up nearly 85 percent of small land purchases statewide. The Austin-Waco-Hill Country region comprised 34.5 percent of all Texas small land purchased in 2016. While the reasons for purchasing a small land tract vary widely across the state – from recreational ranchettes in the Texas Hill Country to commercial ranches in Far West Texas – increased urban sprawl due to statewide population growth could begin to impact the viability of certain land uses across the state. This is particularly evident for agricultural and ranching operations in Texas, as increased urban development is slowly decreasing the volume of working land – privately owned farms, ranches, and forests that produce goods as well as preserve natural resources and wildlife habitats. In its most recent Texas Land Trends Report, the Texas A&M Natural Resources Institute cites a loss of 1.1 million acres in working land statewide since 1997. Such working lands play an integral role in local economies and could threaten statewide industries as Texas continues to grow.
Total Acreage Sold by Region: 2016 5,643
13,462
42,138
11,723
25,373
Panhandle & South Plains West Texas Gulf Coast - Brazos Bottom Austin-Waco-Hill Country
12,617
55,078
Far West Texas Northeast Texas South Texas
Texas Small Land Sales by Region: 2016 0.7% 4.2% 2.3%
31.9%
Panhandle & South Plains West Texas Gulf Coast - Brazos Bottom Austin-Waco-Hill Country
17.9%
8.6
34.5 %
Far West Texas Northeast Texas South Texas
REGION ONE: PANHANDLE
SOUTH PLAINS CHARACTERISTICS •
Encompasses the northernmost regions in the state as well as the Amarillo, Lubbock, Odessa and Midland Metropolitan Statistical Areas (MSAs).
•
Small land sales consist of land parcels of 159 acres or less.
•
Includes the following Texas counties: Andrews, Armstrong, Bailey, Borden, Briscoe, Carson, Castro, Cochran, Crosby, Dallam, Dawson, Deaf Smith, Ector, Floyd, Gaines, Garza, Gray, Hale, Hansford, Hartley, Hemphill, Hockley, Howard, Hutchinson, Lamb, Lipscomb, Lubbock, Lynn, Martin, Midland, Moore, Ochiltree, Oldham, Parmer, Potter, Randall, Roberts, Sherman, Swisher, Terry, and Yoakum.
&
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region One: Panhandle and South Plains Small land sales in the Texas Panhandle and South Plains region are heavily influenced by agricultural trends. The Real Estate Center states that nearly 50 percent of land use in this region is for dry or irrigated crop production. In 2016, rising demand for irrigated farmland led to moderate gains in small land sales activity and strong gains in acreage prices throughout the region. Small land sales increased 3.8 percent yearover-year to 163 sales in 2016, while the average price per acre for small land tracts surged 34.8 percent to $2,374 per acre during the same time frame. This was the highest annual price gain of any Texas region in 2016. The average land tract size in Region One was 63 acres, or 17 fewer acres than the year prior. Region One had the largest average tract size of any Texas region in 2016, but also the highest decline in average tract size from 2015.
Small Land Sales Volume 2015
Small Land Sales Volume 2015 vs. 2016
Average Tract Size
157
163
Average Price Per Acre
80 acres
2015
2015
63 acres
2016
2016
2016
TEXAS SMALL LAND SALES REPORT | 2017 EDITION 2016
Region One: Panhandle and South Plains 2015 The total acreage of small land parcels sold declined 10.6 percent from 2015 to 11,723 total acres sold. The total sales dollar volume of small land sales in Region One was $27,832,562, a 20.48 percent increase from 2015. Region One still comprises a relatively small portion of all small land sales statewide. In 2016, 2.3 percent of Texas small land sales were sold in the Panhandle and South Plains. While low commodity prices continue to impact the profitability of farming operations, the Real Estate Center states that small land sales and pricing in Region One is being driven by buying activity among farmers, particularly in the dairy sector. Dairies are purchasing cropland to grow their own feed and eliminate future feed cost risk.
$23,101,290
$27,832,562
Total Sales Dollar Volume
13,117
11,723
2015
2016
Total Acres Sold
REGION TWO: FAR
TEXAS
CHARACTERISTICS •
Encompasses the westernmost regions in the state as well as the El Paso MSA.
•
Small land sales typically consist of land parcels of 500 to 8,000 acres, although small land sales of less than 500 acres are included within report data as well.
•
Includes the following Texas counties: Brewster, Crane, Culberson, El Paso, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terrell, Ward and Winkler.
WEST
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Two: Far West Texas Far West Texas was one of only two regions to experience annual declines in average price per acre in 2016, falling 64.9 percent to $1,318 per acre. This was the largest annual price drop of any Texas region in 2016. Conversely, small land sales posted strong gains in 2016, increasing 29 percent year-over-year to 49 sales in 2016. This was the highest annual gain in small land sales volume of any Texas region. The Real Estate Center attributes the price declines to market volatility generated from oil and gas activity in that region, rather than an indicator of a true market trend. The average land tract size in Region Two was 58 acres, or 14 fewer acres than the year prior. Although the definition for small land sales in Region Two is by far the highest in the state (between 500-8,000 acres), Region Two had the second-highest average tract size among the seven Texas regions in 2016.
Small Land Sales Volume Small Land Sales Volume 2015 vs. 2016
Average Tract Size
38
2015
49
Average Price Per Acre
72 acres
2015
2015
58 acres
2016
2016
2016
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Two: Far West Texas
2015
In Far West Texas, the total acreage of small land parcels sold increased 24.6 percent from 2015 to 5,643 total acres sold. This is the highest annual gain in total acreage sold for a region in 2016. The total sales dollar volume of small land sales in Region Two was $7,436,944, a 56.21 percent decrease from 2015. Region Two comprises a fraction of all small land sales statewide. In 2016, less than one percent (0.7 percent) of Texas small land sales were sold in Far West Texas.
While there is growing demand for urban development surrounding El Paso as well as for recreational properties in the Big Bend area, the overall demand for small land tracts in Far West Texas will continue to be dominated by ranching and mining activity. Region Two’s sprawling native rangelands are ideal for cattle grazing as well as oil and gas exploration and development.
2016
$16,981,497
$7,436,944
Total Sales Dollar Volume
4,529
2015
5,643
2016
Total Acres Sold
REGION THREE: WEST CHARACTERISTICS •
Encompasses cross-sections of North, Central and South Central Texas, stretching from the Oklahoma border all the way down to the Mexican border. Region Three includes the San Angelo and Abilene MSAs.
•
Small land sales consist of land parcels of 94 acres or less.
•
Includes the following Texas counties: Archer, Baylor, Childress, Clay, Coke, Collingsworth, Concho, Cottle, Crockett, Dickens, Donley, Edwards, Fisher, Foard, Glasscock, Hall, Hardeman, Haskell, Jones, Kent, King, Kinney, Knox, Love, Mitchell, Motley, Nolan, Reagan, Runnels, Schleicher, Scurry, Shackelford, Stephens, Sterling, Stonewall, Sutton, Taylor, Throckmorton, Tom Green, Upton, Val Verde, Wheeler, Wichita, Wilbarger and Young.
TEXAS
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Three: West Texas West Texas was the only region to experience annual declines in small land sales volume in 2016, falling 20.6 percent year-over-year to 290 small land sales in 2016. The average price per acre for small land sales in Region Three increased slightly from 2015, rising 3.8 percent year-over-year to $3,125 per acre.
Small Land Sales Volume 2015 Small Land Sales Volume 2015 vs. 2016
Average Tract Size
The average land tract size in West Texas in 2016 was 43 acres, six additional acres than the year prior. On a regional level, this was the highest annual gain in average tract size among small land sales in 2016.
37 acres
Modest gains in average price per acre as well as an increasing average tract size year-overyear indicates that small land sales in West Texas are being impacted by the growing shortage of prime land as buyers are forced to consider less-desirable tracts. Such properties may not be ideally located, lack fencing or water, or require additional development.
43 acres
2015
2016
365 290
2016
Average Price Per Acre
2015
2016
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Three: West Texas
2015 2016
In West Texas, the total acreage of small land parcels sold declined 13.3 percent from 2015 to 13,462 total acres sold. This is the highest yearover-year decline in total acreage sold among Texas regions in 2016. The total sales dollar volume of small land sales in Region Three was $42,070,227, a 10.03 percent decline from 2015. West Texas was only one of two Texas regions to experience an annual decline in sales dollar volume in 2016. Region Three comprises a small portion of all small land sales statewide. In 2016, 4.2 percent of Texas small land sales were sold in West Texas. Like many other regions in Texas, small land sales in West Texas are heavily impacted by farming, ranching and oil and gas drilling activity. According to the Real Estate Center, the demand for smaller parcels of West Texas rangeland is notably greater than the demand for large rangeland tracts.
$46,759,108
$42,070,227
Total Sales Dollar Volume
15,530
13,462
2015
2016
Total Acres Sold
REGION FOUR: NORTHEAST
TEXAS
CHARACTERISTICS •
Encompasses the Dallas-Fort Worth-Arlington, Longview, Sherman-Denison, Texarkana, Tyler and Wichita Falls MSAs.
•
Small land sales consist of land parcels of 33 acres or fewer.
•
Includes the following Texas counties: Anderson, Angelina, Bowie, Camp, Cass, Cherokee, Collin, Cooke, Dallas, Delta, Denton, Ellis, Fannin, Franklin, Grayson, Gregg, Harrison, Henderson, Hood, Hopkins, Houston, Hunt, Jasper, Johnson, Kaufman, Lamar, Marion, Montague, Morris, Nacogdoches, Newton, Palo, Pinto, Panola, Parker, Polk, Rains, Red River, Rockwall, Rusk, Sabine, San Augustine, Shelby, Smith, Somervell, Tarrant, Titus, Trinity, Tyler, Upshur, Van Zandt, Wise and Wood.
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Four: Northeast Texas Northeast Texas experienced strong gains in small land sales volume in 2016, jumping 20.9 percent year-over-year to 2,230 small land sales.
Small Land Sales Volume 2015 Small Land Sales Volume 2015 vs. 2016
The average price per acre for small land sales in Region Four also experienced strong growth in 2016, rising 13.3 percent year-over-year to $8,315 per acre.
Average Tract Size
The average land tract size in Northeast Texas in 2016 was 18 acres, one less acre than the year prior. Along with Region Five, Region Four had the smallest average land tract size in 2016.
19 acres
Northeast Texas has one of the most diverse ranges of land usage in the state. In addition to strong demand for pastureland as well as recreational properties, the region’s Piney Woods areas are also in high demand due to strong timber prices.
2015
1,845
2,230
Average Price Per Acre
2015
18 acres
2016
2016
2016
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Four: Northeast Texas
2016 2015
In Northeast Texas, the total acreage of small land parcels sold jumped 18.7 percent from 2015 to 42,138 total acres sold. The total sales dollar volume of small land sales in Region Four was $350,367,952 – a 34.43 percent jump from 2015. This was the highest annual gain in total sales dollar volume among all Texas regions in 2016. Due to high property demand surrounding the Dallas-Fort Worth metro area, Region Four comprised nearly one-third of all small land sales statewide. In 2016, 31.9 percent of Texas small land sales were sold in Northeast Texas. With strong population growth, recreational activity and diverse industry activity, the Northeast Texas region continues to have one of the highest-performing small land markets in the state of Texas.
$260,622,970
$350,367,952
Total Sales Dollar Volume
35,510
42,138
2015
2016
Total Acres Sold
GULF COAST – BRAZOS BOTTOM REGION FIVE: CHARACTERISTICS •
Encompasses the Beaumont-Port Arthur, BryanCollege Station, Houston-The WoodlandsSugarland and Victoria MSAs.
•
Small land sales consist of land parcels of 42 acres or less.
•
Includes the following Texas counties: Austin, Brazoria, Brazos, Burleson, Calhoun, Chambers, Colorado, De Witt, Fayette, Fort Bend, Galveston, Gonzales, Grimes, Hardin, Harris, Jackson, Jefferson, Lavaca, Leon, Liberty, Madison, Matagorda, Montgomery, Orange, Robertson, San Jacinto, Victoria, Walker, Waller, Washington and Wharton.
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Five: Gulf Coast – Brazos Bottom The Gulf Coast – Brazos Bottom experienced strong gains in small land sales volume in 2016, increasing 10 percent year-over-year to 1,250 small land sales. The average price per acre for small land sales in Region Five also increased in 2016, rising 1.9 percent year-over-year to $10,182 per acre. Due to Region Five’s inclusion of the Houston metro area as well as high market values for coastal property, the average price per acre in this region is the highest in the state. The average land tract size in the Gulf Coast – Brazos Bottom in 2016 was 18 acres, one less acre than the year prior. Along with Region Four, Region Five had the smallest average land tract size in 2016. Second homes and recreational properties make up a large majority of the demand for small land tracts in Region Five. Individuals in and around Houston are purchasing outlying properties and ranches for investment, weekend retreats or hunting. Commercial development also continues to be strong, particularly surrounding Houston and in the Brazos Valley.
Small Land Sales Volume
Small Land Sales Volume 2015 vs. 2016
Average Tract Size
1,136
2015
1,250
Average Price Per Acre
19 acres
2015
2015
18 acres
2016
2016
2016
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Five: Gulf Coast – Brazos Bottom
2016 2015
In the Gulf Coast – Brazos Bottom, the total acreage of small land parcels sold rose 7.6 percent from 2015 to 25,373 total acres sold. The total sales dollar volume of small land sales in Region Five was $258,360,332, a 9.57 percent increase from 2015. Due to high property demand surrounding the Houston metro area, Region Five comprised nearly one-fifth of all small land sales statewide. In 2016, 17.9 percent of Texas small land sales were sold in the Gulf Coast – Brazos Bottom. Historically, small land sales activity in Region Five is influenced by the price of oil more than in any other region. Strong population growth in this region as well as recovering oil prices could continue to boost small land sales activity through 2017.
$235,800,875
$258,360,332
Total Sales Dollar Volume
23,589
25,373
2015
2016
Total Acres Sold
REGION SIX: SOUTH CHARACTERISTICS •
Encompasses the Brownville-Harlingen, Corpus Christi Laredo, McAllen-EdinburgMission and San Antonio-New Braunfels MSAs.
•
Small land sales consist of land parcels of 44 acres or less.
•
Includes the following Texas counties: Aransas, Atascosa, Bee, Bexar, Brooks, Cameron, Comal, Dimmit, Duval, Frio, Goliad, Guadalupe, Hidalgo, Jim Hogg, Jim Wells, Karnes, Kenedy, Kleberg, La Salle, Live Oak, Maverick, McMullen, Medina, Nueces, Refugio, San Patricio, Starr, Uvalde, Webb, Willacy, Wilson and Zavala.
TEXAS
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Six: South Texas South Texas experienced modest gains in small land sales volume in 2016, increasing 1.4 percent year-over-year to 601 small land sales. Conversely, the average price per acre for small land sales in Region Six declined slightly in 2016, decreasing 3.9 percent year-over-year to $8,407 per acre.
Small Land Sales Volume Small Land Sales Volume 2015 vs. 2016
Average Tract Size
2015
593 601
Average Price Per Acre
The average land tract size in South Texas in 2016 was 19 acres, one acre more than the year prior. Modest gains in average price per acre as well as an increasing average tract size year-over-year indicates that small land sales in South Texas are being impacted by the growing shortage of prime land as buyers are forced to consider less-desirable tracts. Such properties may not be ideally located, lack fencing or water, or require additional development.
18 acres
2015 2015
19 acres
2016
2016
2016
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Six: South Texas 2016 2015
In South Texas, the total acreage of small land parcels sold rose 6.7 percent from 2015 to 12,617 total acres sold. The total sales dollar volume of small land sales in Region Six was $106,079,365, a 2.49 percent increase from 2015. Despite inclusion of the San Antonio metro area, Region Six comprised a relatively small portion of small land sales statewide. In 2016, 8.6 percent of Texas small land sales were sold in South Texas.
Oil and gas activity in the Eagle Ford Shale continues to impact small land sales activity in South Texas, with uncertainty in the market lingering from the recent downturn in the energy sector. According to the Real Estate Center, discussions at a national level for a proposed border wall and renegotiations of the North American Free Trade Agreement (NAFTA) could impact South Texas land values and thus is also increasing concerns among potential buyers.
$103,503,041
$106,079,365
Total Sales Dollar Volume
11,826
12,617
2015
2016
Total Acres Sold
REGION SEVEN: AUSTIN
– WACO – HILL COUNTRY CHARACTERISTICS •
Encompasses the Austin-Round Rock, Killeen-Temple-Fort Hood and Waco MSAs.
•
Small land sales consist of land parcels 49 of acres or less.
•
Includes the following Texas counties: Bandera, Bastrop, Bell, Blanco, Bosque, Brown, Burnet, Caldwell, Callahan, Coleman, Comanche, Coryell, Eastland, Erath, Falls, Freestone, Gillespie, Hamilton, Hays, Hill, Kendall, Kerr, Kimble, Lampasas, Lee, Limestone, Llano, Mason, McCulloch, McLennan, Menard, Milam, Mills, Navarro, Real, San Saba, Travis and Williamson.
TEXAS SMALL LAND SALES REPORT | 2017 EDITION
Region Seven: Austin – Waco – Hill Country The Austin – Waco – Hill Country region experienced strong gains in small land sales volume in 2016, jumping 21 percent year-over-year to 2,409 small land sales. Once again, Region Seven led the state in small land sales volume in 2016. The average price per acre for small land sales in Region Seven also increased in 2016, rising 3.9 percent year-over-year to $8,684 per acre. Due to Region Seven’s inclusion of the Austin metro area as well as high market values for Hill Country property, the average price per acre in this region is the second-highest in the state. The average land tract size in the Austin – Waco – Hill Country region in 2016 was 20 acres, which is unchanged from the year prior. With some of the fastest growing local market areas in the nation, high demand for land within Region Seven continues to be driven by immediate development needs. Recreational properties for Austin residents as well as farmland in the Central Blacklands also continue to be high in demand.
Small Land Sales Volume 2015
Small Land Sales Volume 2015 vs. 2016
Average Tract Size
1,991 2,409
Average Price Per Acre
20 acres
2015
2015
20 acres
2016
2016
2016
TEXAS SMALL LAND SALES REPORT | 2017 EDITION 2016
Region Seven: Austin – Waco – Hill Country In the Austin – Waco – Hill Country region, the total acreage of small land parcels sold jumped 21.8 percent from 2015 to 55,078 total acres sold. This was the highest total acreage sold of any Texas region in 2016. The total sales dollar volume of small land sales in Region Seven was $478,290,163, a 26.48 percent jump from 2015. This was also the highest small land sales dollar volume of any Texas region in 2016. Due to high property demand surrounding the Austin metro area, Region Seven comprised more than one-third of all small land sales statewide. In 2016, 34.5 percent of Texas small land sales were sold in the Austin – Waco – Hill Country region. Region Seven will likely always have a high demand for small land parcels due to its central location within the state. Small land sales activity within Central Texas is driven by buyers from Austin as well as the Waco-Temple-Killeen, San Antonio-New Braunfels and Dallas-Fort Worth MSAs.
2015
$378,165,806
$478,290,163
Total Sales Dollar Volume
45,229
55,078
2015
2016
Total Acres Sold
Texas Small Land Sales Report 2016 Edition Release date: June 1, 2016
About the Texas Small Land Sales Report The Texas Small Land Sales Report analyzes small land sales data and trends across seven regions of Texas with data provided by the Real Estate Center at Texas A&M University. The Texas Association of REALTORS速 distributes insights about the Texas housing market each month, including quarterly market statistics, trends among homebuyers and sellers, luxury home sales, international trends, and more. To view the Texas Small Land Sales Report in its entirety, visit TexasRealEstate.com.
About the Texas Association of REALTORS速 With more than 100,000 members, the Texas Association of REALTORS速 is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS速 and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more.
Contact:
Danielle Urban Pierpont Communications 512-448-4950 durban@piercom.com
Texas Small Land Sales Report
June 2016
Executive Summary Texas small land sales were the strongest segment of the Texas real estate market in 2015, with double-digit increases in small land sales and price per acre, according to the Texas Small Land Sales Report released today by the Texas Association of Realtors. According to the report, 6,281 small land tracts were sold in Texas in 2015, an 18.91 percent increase from 2014. This double-digit growth was consistent across all regions, with the exception of Region Five: Gulf Coast-Brazos Bottom, which fell 7.43 percent to 1,146 small land sales, and Region Two: Far West Texas, which increased 8.57 percent to 38 small land sales. Region Seven: Austin-Waco-Hill Country recorded the most small land sales, jumping 19.74 percent to 2,062 sales in 2015. The average price per acre for small land sales also increased, rising 10.21 percent to $5,657 per acre statewide. Region One: Panhandle-South Plains and Region Four: Northeast Texas were the only regions to show decreases in average price per acre, falling 4.79 percent to $1,749 per acre and 3.5 percent to $7,305 per acre, respectively. Region Five had the highest average price per acre, with land prices increasing 9.44 percent to $10,002 per acre. Statewide average tract size continued to drop in 2015, as high demand for Texas land drove down the average tract size 13.33 percent to 39 acres statewide. However, average tract sizes increased in Regions One, Four and Five and remained flat in Region Seven. Economists with the Real Estate Center at Texas A&M University, explained that these increases are likely due to a shortened supply of prime land, not a decline in demand, as Texans increasingly view land as a wise investment.
2 TexasRealEstate.com
Texas Small Land Sales Report
June 2016
Texas `Small land sales throughout the Lone Star State surged throughout 2015, despite recent downturns in the energy sector and a sluggish outlook for state agriculture. All seven regions, with the exceptions of Region Two in Far West Texas and Region Five near the Gulf Coast, experienced significant gains in small land sales throughout the year. The average tract size for small land parcels in Texas declined as continued demand for prime land is driving down tract sizes and raising land costs.
Texas and its seven regions are home to a diverse scope of land characteristics, from rugged desert arroyos to subtropical thickets and from sea-level plains to alpine vistas. This extreme variety in terrain and size significantly affects the size, sale and use of small land tracts throughout Texas. 3 TexasRealEstate.com
Texas Small Land Sales Report
June 2016
Texas, continued
4 TexasRealEstate.com
Texas Small Land Sales Report
June 2016
Region One – Panhandle and South Plains Small land sales in Region One are influenced by farming and agricultural trends more than any other region in the state. Despite sluggish forecasts for agriculture and farming in Texas, small land sales in Region One increased significantly in 2015. The average price per acre of small land sales in Region One dipped slightly in 2015 due to a waning demand for dry land and lesser-quality irrigated land, causing buyers in the region to be more cautious about purchasing land for agricultural use and thus affecting land prices. As a result, the average tract size for small land sales in Region One also increased significantly in 2015.
Region One is the northernmost region in the state, encompassing the Metropolitan Statistical Areas for Amarillo, Lubbock, Odessa and Midland. Small land sales consist of land parcels 159 acres or smaller. 5 TexasRealEstate.com
Texas Small Land Sales Report
June 2016
Region One – Panhandle and South Plains, continued
6 TexasRealEstate.com
Texas Small Land Sales Report
June 2016
Region Two – Far West Texas With ranching dominating most land uses, Region Two is home to the largest tract sizes and smallest sales volume for land sales in the state. Small land sales were up in Region One in 2015. While the average price per acre among small land sales declined during the same time period, prime agricultural land – particularly around the Pecos, Texas area – remains highly priced. The decline of the energy sector significantly affected the demand for mineral-classified lands, while small land use for agricultural and recreational purposes remained in demand.
Region Two encompasses West Texas and contains the El Paso Metropolitan Statistical Area. Small land sales consist of land parcels between 500 and 8,000 acres. 7 TexasRealEstate.com
Texas Small Land Sales Report
June 2016
Region Two – Far West Texas, continued
8 TexasRealEstate.com
Texas Small Land Sales Report
June 2016
Region Three – West Texas Small land sales in Region Three experienced sharp increases in 2015, most likely due to purchases of recreational properties by buyers interested in family or hunting properties. The average price per acre for small land sales in Region Three increased in 2015, while the average tract size decreased, indicating strong demand for small land sales in the area. Sales are also being driven by the sale of inherited properties. Increasingly, younger owners are letting go of these properties to live closer to urban areas and avoid the upkeep of a large property.
Region Three stretches from the Texas-Oklahoma border to the Mexico border and consists of Metropolitan Statistical Areas for San Angelo and Abilene. Small land sales consist of land parcels 94 acres or smaller in this region. 9 TexasRealEstate.com
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Region Three – West Texas, continued
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Region Four – Northeast Texas As one of the fastest-growing areas in Texas, Region Four experienced strong gains in small land sales in 2015. The average price per acre for small land sales in Region Four declined slightly in 2015. Surges in land sales since 2013 have limited the supply of prime land along key corridors. As a result, supply is largely limited to more remote, lesser quality parcels, leading to declines in land prices. Additionally, a slowing in small land sales growth in Region Four led to a slight increase in average tract size in 2015.
Region Four encompasses the Metropolitan Statistical Areas for Dallas-Fort Worth-Arlington, Wichita Falls, Sherman-Denison, Texarkana, Longview and Tyler. In this region, small land sales consist of land parcels 33 acres or smaller. 11 TexasRealEstate.com
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Region Four – Northeast Texas, continued
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Region Five – Gulf Coast | Brazos Bottom Region Five was the only region in Texas to experience a decrease in small land sales in 2015. Despite the recent downturn of the oil and gas sector in the region, the small land sales The market has remained fairly resilient. Demand for small land parcels in rural areas surrounding the Houston area continues to be popular for urban dwellers seeking second homes and recreational properties. This demand is evident in the year-over-year increases in average price per acre for small land sales experienced in 2015.
Region Five includes one of the state’s largest Metropolitan Statistical Areas, Houston-The WoodlandsSugarland, in addition to College Station-Bryan, Victoria and Beaumont-Port Arthur. In this region, small land sales consist of land parcels 42 acres or smaller. 13 TexasRealEstate.com
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Region Five – Gulf Coast | Brazos Bottom, continued
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Region Six – South Texas Contrary to large land sales, small land sales throughout Region Six experienced strong growth in 2015. Likely a continued after-effect of the recent oil and gas boom in the Eagle Ford Shale, a majority of land sales were purchased for urban development in the region. This enduring demand led to significant increases in the average price per acre for small land parcels as well as declines in average tract size.
Region Six encompasses the Metropolitan Statistical Areas for San Antonio, Laredo, Corpus Christi, McAllen-Edinburg-Mission and Brownsville-Harlingen. In this region, small land sales consist of land parcels 44 acres or smaller. 15 TexasRealEstate.com
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Region Six – South Texas, continued
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Region Seven – Austin | Waco | Hill Country Central Texas’ population growth has seen little slow-down, and the same went for small land sales in 2015. Encompassing one-third of small land sales in Texas, Region Seven’s Hill Country views and lakeside access makes land in this region among the most sought after in the state. Land use in Region Seven is almost solely recreational. Properties are ideal for retirees and families seeking a lake property, hunting lease or second home.
Region Seven includes the Metropolitan Statistical Areas for Austin-Round Rock-San Marcos, KilleenTemple-Fort Hood and Waco in addition to the Texas Hill Country and the Highland Lakes system. In this region, small land sales consist of land parcels 49 acres or smaller. 17 TexasRealEstate.com
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Region Seven – Austin | Waco | Hill Country
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Texas Small Land Sales Report
Contact:
2015 Edition Release date: June 1, 2015
About the Texas Small Land Sales Report The Texas Small Land Sales Report analyzes small land sales data and trends across seven regions of Texas with data provided by the Real Estate Center at Texas A&M University. The Texas Association of REALTORS® distributes insights about the Texas housing market each month, including quarterly market statistics,
trends
among
homebuyers
and
sellers,
luxury
home
sales,
international trends, and more. To view the Texas Small Land Sales Report in its entirety, visit TexasRealEstate.com.
About the Texas Association of REALTORS® With more than 95,000 members, the Texas Association of REALTORS® is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS® and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more.
Stacy Armijo Pierpont Communications 512-448-4950 sarmijo@piercom.com
Texas Small Land Sales Report
June 2015
Executive Summary Small land sales throughout Texas posted double-digit growth and average price per acre showed strong increases statewide last year, according to the 2015 Texas Small Land Sales Report released June 1 by the Texas Association of REALTORS®. According to the report, 5,282 small land tracts were sold in Texas in 2014, a 20.69 percent increase from 2013. This double-digit growth was consistent across all seven regions, with the exception of Region One (Panhandle and South Plains), which decreased 7.93 percent to 116 small land sales in 2014. For the second year, Region Seven (Austin / Waco / Hill Country) showed the most small land sales of any region, with sales increasing 19.16 percent to 1,722 small land sales during the same time frame. The average price per acre for Texas small land sales also showed strong gains in most regions in 2014, increasing 3.5 percent year-over-year to $5,018 per acre statewide. Regions Two (Far West Texas) and Five (Gulf Coast – Brazos Bottom) were the only regions to show decreases in price, falling 47.24 percent to $1,635 per acre and 0.31 percent to $9,167 per acre, respectively. Region Five also had the highest average price per acre of any region. Median tract size, conversely, decreased slightly across the state as strong demand for Texas real estate continues. While the statewide median tract size remained constant at 20 acres, most regions showed decreases in median tract sizes between 3 and 10 percent in 2014. The exception was Region Two, in which the median tract size grew 54.16 percent to 120 acres during the same time frame. Due to the significant physical variations among the seven regions, the definition of a small land tract varies from approximately 30 to 160 acres in each region. The exception is Region Two, in which 500 to 8,000 acres qualifies as a small land sale.
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Texas Texas and its seven regions are home to a diverse scope of land characteristics from rugged desert arroyos to subtropical thickets and from sea-level plains to alpine vistas. This extreme variety in terrain and size affects the ownership and marketing of land significantly.
The small land sales market is similar to the overall housing market in Texas, with high demand, competitive market conditions and robust sales and price growth. The explosive buyers’ rush for small land tracts that began in 2013 is on track to continue through 2015.
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Small land sales in Texas had 5,282 sales in 2014, a 20.69 percent increase compared to last year.
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The median tract size in Texas was 20 acres in 2014, which is unchanged from 2013.
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Average price per acre for small land tracts in Texas was $5,018 in 2014. This is a 3.5 percent increase compared to 2013. Adjusted for inflation, this equates to $891* per acre.
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Texas Small Land Sales Report
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Texas, continued A majority of Texas’ small land sales in 2014 were located in Regions Four (Northeast Texas), Five (Gulf Coast-Brazos Bottom) and Seven (Austin-Waco-Hill Country). Three of Texas’ major metro areas, Austin, Dallas-Fort Worth and Houston, are located in these regions. Most all markets posted year-over-year increases for small land sales with the exception of Region One (Panhandle and South Plains). Due to rising demand, median tract sizes for small land parcels decreased across the state in 2014. The exception was Region Two (Far West Texas), where the median tract size increased 54.16 percent from 2013.
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Region One – Panhandle and South Plains Region One is the northernmost region in the state, encompassing the Metropolitan Statistical Areas for Amarillo, Lubbock, Odessa and Midland in addition to being bordered by New Mexico to the west and Oklahoma to the north and east. In this region, small land sales consist of land parcels 159 acres or smaller. Small land sales in Region One are more influenced by farming and agricultural trends than any other region in the state. Low corn and cotton prices have had a slight cooling effect on small land sales in the region, but not by much. Overall, the small land sales market in Region One continues to be strong. •
Region One had 116 small land sales in 2014, a 7.93 percent decrease from 2013.
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The volume of small land sales for Region One comprised 2.19 percent of all small land sales statewide in 2014.
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The median tract size for small land sales in Region One was 78 acres in 2014, a 3.7 percent decrease from 2013.
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Region One – Panhandle and South Plains, continued
Small land tract prices, however, continue to show significant growth. This was largely influenced by a rush from investors to acquire farmland investments in early 2014.
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The average price per acre for Region One was $1,880 in 2014. This is a 12.32 percent increase compared to 2013. Adjusted for inflation, this equates to $334* per acre.
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Compared to the rest of the state, small land tracts in Region One cost significantly less. Region One had the second-lowest price per acre in the state in 2014.
*Adjusted figures are in 1966 dollars.
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Region Two – Far West Texas Region Two encompasses West Texas and contains the El Paso Metropolitan Statistical Area. Region Two is home to the four largest counties in the state – Brewster, Hudspeth, Presidio and Culberson. For this reason, small land sales consist of land parcels between 500 and 8,000 acres. Because of its large tract sizes and limited number of small land sales reported each year, Region Two typically shows significant variances in both small land sales growth and price per acre from year-to-year. •
Region Two had 35 small land sales in 2014, a 40 percent increase compared to 2013.
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The volume of small land sales for Region Two in 2014 comprised 0.66 percent of all small land sales statewide.
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The median tract size for small land sales in Region Two was 120 acres in 2014, a 54.16 percent increase from 2013.
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Region Two – Far West Texas, continued The price per acre as well as the median tract size for small land sales in Region Two also showed strong variances in 2014 compared to 2013. •
Average price per acre for Region Two was $1,635 per acre in 2014. This is a 47.24 percent decrease compared to 2013. Adjusted for inflation, this equates to $290* per acre.
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Compared to the rest of the state, small land tracts in Region Two cost significantly less. Region Two had the lowest price per acre in the state in 2014.
*Adjusted figures are in 1966 dollars.
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Region Three – West Texas Region Three stretches from the Texas-Oklahoma border on the north to the Mexico border on the south and consists of Metropolitan Statistical Areas for San Angelo and Abilene. Every region except Region Five touches a portion of Region Three. Small land sales consist of land parcels 94 acres or smaller in this region. Activity in Region Three is a reflection of statewide interest in 2014. Land purchases here are recreational in character, most likely from professionals in the oil industry looking to build a ranchette for hunting season. The slight decline in median tract size makes large livestock operations difficult, but smaller rangeland activity is still popular. •
Region Three had 252 small land sales in 2014, a 15.47 percent increase compared to the previous year.
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The volume of small land sales for Region Three in 2014 comprised 4.77 percent of all small land sales statewide.
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The median tract size for small land sales in Region Three was 41 acres in 2014, an 8.88 percent decrease from 2013.
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Region Three – West Texas, continued Region Three was reflective of statewide land market trends in 2014. Small land purchases in this region are mostly for recreational purchases, such as oil and gas professionals looking for a ranchette or hunting property, as the declining tract size makes land use for livestock or ranching operations difficult. •
Average price per acre for Region Three was $2,503 per acre in 2014. This is a 13.47 percent increase compared to 2013. Adjusted for inflation, this equates to $445* per acre.
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Region Three had the third-lowest price per acre in the state in 2014.
*Adjusted figures are in 1966 dollars.
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Region Four – Northeast Texas Region Four encompasses the Metropolitan Statistical Areas for Dallas-Fort Worth-Arlington, Wichita Falls, ShermanDenison, Texarkana, Longview and Tyler. The north and east sides of the region are bordered by Oklahoma, Arkansas and Louisiana. In this region, small land sales consist of land parcels 33 acres or smaller. Region Four typically follows the trends of the national economy at large and was the last Texas region to recover after the recession. The growth in sales volume and price per acre seen in small land sales markets in other regions over the last few years is just beginning in Region Four. •
Region Four had 1,428 small land sales in 2014, a 17.01 percent increase compared to last year.
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The volume of small land sales for Region Four in 2014 comprised 27.03 percent of all small land sales statewide.
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The median tract size in Region Four was 17 acres in 2014, a 5.55 percent decrease from 2013.
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Region Four – Northeast Texas, continued Like other Texas regions containing major metro areas, small land sales purchases in Region Four are typically for residential and recreational purchases, such as weekend getaways for Texans living in Dallas-Fort Worth. According to the Real Estate Center at Texas A&M University, small land tracts in the east end of this region – such as Piney Woods – appear to be underpriced and could provide good opportunities for investors. •
Average price per acre for Region Four was $7,543 per acre in 2014. This is an 8.25 percent increase compared to 2013. Adjusted for inflation, this equates to $1,339* per acre.
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Region Four had the third-highest price per acre in the state in 2014.
*Adjusted figures are in 1966 dollars.
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Region Five – Gulf Coast | Brazos Bottom Region Five is located to the southeast of the state and includes one of the largest Metropolitan Statistical Areas, Houston-Sugar Land-Baytown in addition to College Station-Bryan, Victoria and Beaumont-Port Arthur. In this region, small land sales consist of land parcels 42 acres or smaller. Small land sales in Region Five skyrocketed in 2014, despite The falling oil prices in the last quarter of 2014. Most of the small land sales in this region occur around the Houston metro area and, like Regions Four and Seven, are purchased by metro residents seeking a recreational property out of town. •
Region Five had 1,238 small land sales in 2014, a 34.16 percent increase compared to 2013.
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The volume of small land sales for Region Five in 2014 comprised 23.43 percent of all small land sales statewide.
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The median tract size in Region Five was 18 acres in 2014, a 10 percent decrease from 2013.
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Region Five – Gulf Coast | Brazos Bottom, continued To date, small land sales in Region Five have not been affected by the downturn of the oil and gas industry. However, it’s unclear what the long-term effect of lower oil prices will be on land sales in the future. •
Average price per acre for Region Five was $9,167 per acre in 2014. This is a 0.31 percent decrease compared to 2013. Adjusted for inflation, this equates to $1,628* per acre.
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Region Five had the highest price per acre in the state in 2014.
*Adjusted figures are in 1966 dollars.
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Region Six – South Texas Region Six is located in southernmost Texas, encompassing the Metropolitan Statistical Areas for San Antonio, Laredo, Corpus Christi, McAllen-Edinburg-Mission and Brownsville-Harlingen. It is bordered by the Gulf of Mexico to the east and Mexico to the west. In this region, small land sales consist of land parcels 44 acres or smaller. If there was one Texas region that should have been impacted by the fall of oil prices in 2014, Region Six would have been it as it is home to the Eagle Ford Shale. However, small land sales throughout the region were strong throughout 2014. •
Region Six had 491 small land sales in 2014, a 10.99 percent increase compared to last year.
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The volume of small land sales for Region Six in 2014 comprised 9.29 percent of all small land sales statewide.
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The median tract size in Region Six was 19 acres in 2014, a five percent decrease from 2013.
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Region Six – South Texas, continued Region Six continued to post healthy price increases in 2014, driven by growing demand and economic development throughout the Eagle Ford Shale. •
Average price per acre for Region Six was $7,500 per acre in 2014. This is a 4.76 percent increase compared to 2013. Adjusted for inflation, this equates to $1,332* per acre.
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Region Six had the fourth-highest price per acre in the state in 2014.
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Region Seven – Austin | Waco | Hill Country Region Seven forms the central core of Texas, encompassing the Metropolitan Statistical Areas for Austin-Round RockSan Marcos, Killeen-Temple-Fort Hood and Waco in addition to the Texas Hill Country and the Highland Lakes system. In this region, small land sales consist of land parcels 49 acres or smaller. Central Texas’ growing urban population has shown little signs of slowing down, making small land sales popular in 2014. Once again, Region Seven had the highest small land sales volume in Texas. •
Region Seven had 1,722 small land sales in 2014, a 19.16 percent increase compared to last year.
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The volume of small land sales for Region Seven in 2014 comprised 32.6 percent of all small land sales statewide.
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The median tract size in Region Seven was 20 acres in 2014, a 4.76 percent decrease from 2013.
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Region Seven – Austin | Waco | Hill Country The small land sales market in Region Seven is competitive and price per acre for small land tracts has shown strong gains for the last several years. Heavy land sales activity has spread beyond the Austin area to surrounding counties. •
Average price per acre for Region Seven was $7,764 per acre in 2014. This is a 12.51 percent increase compared to 2013. Adjusted for inflation, this equates to $1,379* per acre.
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Region Seven had the second-highest price per acre in the state in 2014.
*Adjusted figures are in 1966 dollars.
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