Seems like investors just can't get enough of that Lone Star State soil. For the second year in a row, the total dollar volume of Texas small land sales has topped $1 billion, while median prices also kept rising for the sixth straight year.
That's according to the 2019 edition of the Texas Small Land Sales Report, released by Texas Realtors. The study analyzes sales data and trends across seven regions of Texas, using information aggregated by the Real Estate Center at Texas A&M University.
Sales volume from 2017 to 2018 increased 5.9 percent annually, resulting in 8,036 tracts sold. The average price per acre grew 5.13 percent year over year, to $5,804 an acre. The definition of a "small" land sale varies by region but generally means 200 acres or less. The exception is far West Texas, where 500 to 8,000 acres qualifies as a small land sale.
"The demand for Texas land continues to increase due to strong population and economic growth," says Tray Bates, chairman of Texas Realtors. "More and more investors are choosing Texas to make small land purchases due to our friendly business environment, booming economy, and wealth of land opportunities. We expect investments in small land for subdivisions or mixed developments will continue, spurring more economic growth across the state as well as attracting more investors."
In the Gulf Coast, region five — which encompasses Houston, The Woodlands, Sugar Land, and College Station — there was a 18.2 percent increase (a total of 1,525 tracts sold), while price per acre increased 3.8 percent to $10,937.
Region seven also saw big gains for Austin, Waco, and the Hill Country. There was a 10.1 percent increase in sales volume, and prices went up 8.2 percent to $9,219.
But there are some places where the numbers went down instead of up. Sales volume in South Texas' region six (San Antonio, New Braunfels, and Corpus Christi) went down 0.87 percent, and prices were down 3.6 percent to $8,087. Dallas-Fort Worth-Arlington's region four (Northeast Texas) saw a decrease of 5.5 percent in volume yet a 10.8 percent increase in price, jumping from $8,731 in 2017 to $9,674 in 2018.
"Overall small land sales in 2018 experienced strong growth, particularly in West Texas, due to a surge in oil and gas production, and in the Gulf Coast area, due to recovery activity from Hurricane Harvey," says Bates.
Charles Gilliland, an economist with the Real Estate Center at Texas A&M University, agrees. "Statewide, smaller properties are growing in popularity. ... With housing prices increasing statewide, there is demand for more subdivision developments, and, thus, more tracts are being purchased for pre-development."