Texas Rural Land Up 3% in 2011, Powered by Strong Farmland Demand
Apr 19, 2012
The value of Texas rural land rose 3% in 2011, according to an analysis of real estate sales conducted by the state's Real Estate Center (REC). The analysis found the average value of an acre of rural Texas land reached $2,150, up from $2,091 in 2010 but down from the peak of $2,247 an acre posted in 2008. On an inflation-adjusted basis, the average value of an acre of Texas rural land rose 2% to $396, up 2% from 2010 but down from 2008's peak of $425 an acre.
"The real story is the low volume of transactions," said the REC Research Economist Dr. Charles Gilliland. Speaking at REC's annual Outlook for Texas Land Markets Conference in San Antonio, Gilliland stated: "Price seems to be hanging in there but volume of activity is no where near what it once was."
The total number of transactions was 4,520, down from 2010's 4,747 sales. However, 2011's sales volume was higher than 2009's 4,045 but down from 2008's 5,725 and 2007's 7,167. "The sales volume levels of the past three years more resembles the volume levels of the 1990s," he observed.
The total number of acres transferred in 2011 was 926,101, down from 2010's 1,045,408 but up from 2008's 908,101 acres. These figures are well short of the 45-year average of 1,691,987 acres annually. For comparison, more than 3,000,000 acres changed hands in 2005. Besides the current three-year period, the only other time the number of acres transferred dipped below 1,000,000 acres was in 1982.
Texas is a very large state with much diversity in land types and geography. That diversity held true in 2011 as the heavy cropland area in the Panhandle and South Plains region posted a 20% surge -- driven primarily by strong demand for irrigated cropland. The Far West region saw an 18% gain -- again driven by strong demand for irrigated cropland, cropland with irrigation potential and oil company demand for mineral-classified land. The West region reported a rise of 7% followed by a gain of 4% for the Gulf Coast and Brazos Bottom and a rise of 3% for the South region. The Austin-Waco-Hill Country region reported a decline of 2% and the North East region listed a decrease of 3%.
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