Texas land is one of the most coveted real estate investments in the world. A business-friendly environment and healthy state economy has driven land fragmentation and massive growth in the Lone Star State. Small land sales surged in 2015, despite a depressed oil market and weakening agriculture outlook. According to the Texas Association of Realtors small land sales were the strongest segment of the Texas real estate market in 2015, with 6,281 small land tracts sold. This is an increase of nearly 19 percent from 2014.
The 2015 Small Land Sales Report showed consistent Double-digit growth across most regions, with the exception of the Gulf Coast-Brazos Bottom, which fell 7.43 percent, and Far West Texas. This is likely due to depressed oil markets that directly affect demand in the Houston and Midland markets.
The IH 35 corridor from Austin to Waco and the Hill Country recorded the most small land sales, jumping nearly 20 percent to 2,062 sales in 2015. The average price per acre in this region was $8,353 and the average tract size was 20 acres. Central Texas’ population growth remains among the strongest in the country, with companies like Amazon setting up shop nearby.
Statewide the average price per acre for small land sales also increased, rising approximately 10 percent. Exceptions were Panhandle-South Plains and Northeast Texas which showed decreases in average price per acre by nearly 5 percent. Gulf Coast-Brazos Bottom had the highest average price per acre at $10,002 per acre.
Heavy demand continued to drive down the average tract size by 13.33 percent statewide to 39 acres. However, average tract sizes increased in some regions including the Gulf Coast-Brazos Bottom near Houston. According to Economists with the Real Estate Center at Texas A&M University, these increases are likely due to a shortened supply of prime land, not a decline in demand.
According to the Realtors Land Institute 2015 Land Market Survey individual families were the leading buyers nationwide at 60 percent, with investors being a distend second at 20 percent. Buyers reported equal amounts of cash purchases to financing at 40 percent and 39 percent respectively. Agriculture, transitional and recreational land are the primary types of land sold.
Overall this is good news for Texas land sellers as prices continue to increase. Contact any one of our professional agents for a free land use analysis or to find out what your property is worth. Heritage Texas Country Properties is a member of the Realtors Land Institute.