After six years of growth, Texas small land sales volume declined in 2019, while median price increased, according to the 2020 edition of the Texas Small Land Sales Report released today by Texas Realtors.
The number of small land sales declined 2.8%, with 7,813 tracts sold across the state. The average price per acre grew 7.32% to $6,232 an acre.
“This comparison of 2018 to 2019 would have been an invaluable trending tool just a few months ago, but given the potential market shifts caused by COVID-19 and its response, it will instead be used more as a benchmark to gauge impact,” said Cindi Bulla, chairman of Texas Realtors. “There are many possibilities for the future of small land sales in Texas. At the moment, it appears small land sales purchases will include residential migrations from more dense metropolitan areas, continued rural and suburban development and increased demand for manufacturing, shipping and warehousing sites.”
The number of small land sales declined in many regions across the state, including the Panhandle and South Plains, Far West Texas, Northeast Texas, Gulf Coast-Brazos Bottom and Austin/Waco/Hill Country. West Texas experienced a double-digital percentage increase while South Texas experienced a moderate increase.
The report also revealed the average tract size for small land sales in Texas decreased 3% to 32 acres. Far West Texas, Northeast Texas and South Texas all experienced increases in average tract size. The average tract size of Austin/Waco/Hill Country remained unchanged year over year.
Charles Gilliland, Ph.D., economist with the Real Estate Center at Texas A&M University, commented, “Property movement statewide was pretty comparable from 2018 to 2019 with the exception of the Panhandle. The significant increase in prices is most likely attributed to the large amount of activity from the oil and gas industry. However, the 2020 picture for small land sales in Texas will be significantly different due to the COVID-19 pandemic.”
The definition of a “small” land sale varies by region but is generally a land sale of 200 acres or less. The exception is Far West Texas, where 500 to 8,000 acres qualifies as a small land sale.
Chairman Bulla concluded, “The Lone Star State continues to pride itself on its business-friendly public policy, a stable, abundant workforce and plenty of land for those who value homesites with a little elbow room. However, similar to the residential real estate side of the industry, time will tell the impact of COVID-19 on small land sales in Texas.”