Thinking about purchasing a weekend home in the Texas Hill Country? Or maybe moving away from the city to your own countryside homestead? You may have land value pricing on your side. Land values for large parcels of land have been growing at a slower pace than most city properties across the state, according to a Real Estate Center at Texas A&M University report.
In the second quarter of 2016, Texas’ statewide land markets prices increased 2.25 percent to $2,544 per acre, compared to 2015’s second quarter price of $2,460 per acre. The typical property used for these statistics was 1,116 acres, down 76 acres from second quarter 2015.
The Austin–Waco–Hill Country region was one of the stronger regions in the state for price increases, as were the Panhandle and South Plains, and Northeast Texas. Far West Texas, Gulf Coast–Brazos Bottom, and South Texas posted weaker gains or decreases, due to pressure from energy price declines. The number of transactions declined across the state, but only by 18 sales out of close to 5,000.
The report noted that over a 10-year period, a 10 percent jump in Texas personal income can be expected to equate to a four percent increase in land prices, whereas a 10 percent jump in oil prices can be expected to equate to a 2.5 percent increase in land prices. The authors of the study speculate land market participants “have a long memory of past price trends and a reluctance to quickly adjust to changing circumstances.” They also suggest that personal income plays a stronger role than oil prices in the overall success of the Texas land market.