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Texas rural land buying frenzy wanes

Oct. 12, 2022  

COLLEGE STATION, Tex. (Texas Real Estate Research Center) – Rural land sales volume fell  26.5 percent from mid-2021 to mid-2022, according to the just released Texas Land Market  Latest Developments by the Texas Real Estate Research Center (TRERC) at Texas A&M  University. 

“Clearly activity appears to be slowing,” said TRERC Research Economist Dr. Charles Gilliland.  “Demand for land, as reported by rural brokers, remains strong but has noticeably cooled from  last year’s frenzied contest.” 

Gilliland said below-asking-price offers have returned to some markets, something not seen  since third quarter 2020. Fewer properties for sale in second quarter 2022, however, increased  prices by 24.5 percent to $4,286 per acre statewide. 

Total second-quarter dollar sales volume hit $3.6 billion, up 28 percent. That compares with a  76.7 percent first-quarter rise, and a 97.6 percent increase in fourth quarter 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.” 

Prices increased by more than 21 percent statewide, except in Far West Texas, where they fell  substantially, says the report. However, total acres transferred declined in several regions, and  total sales dropped everywhere but 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.” 

Read the complete report here.

Funded primarily by Texas real estate license fees, TRERC was created by the state legislature  to meet the needs of many audiences, including the real estate industry, instructors,  researchers, and the public.  

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