One of the most useful resources for rural Texas landowners is the annual Rural Land Value Trends Report published by the Texas Chapter of the American Society of Farm Managers and Rural Appraisers (ASFMRA), according to Texas A&M AgriLife Agricultural Law Specialist Tiffany Lashmet in her recent Texas Agriculture Law Blog. The free 2020 Report was recently released.
"2020 was a wild year in the Texas Real Estate Markets as the impacts of COVID and the resulting economic lockdowns took some time to filter through market activity," said ASFMRA President Justin Bierschwale in the 2020 Report. "Last year at this time, real estate practitioners were in somewhat of a wait and hold approach. Now, with 2020 behind us, our organization has come together for some interesting stories.
"Many of the regions throughout the state demonstrated remarkable gains throughout the year. Most members report buyers being highly motivated to leave urban areas to more open space with the goal of regaining some normalcy in their lives. Others state that buyers were motivated due to companies moving toward work from home scenarios. Still, others reported more influx into the rural markets from out-of-state buyers transitioning to Texas. Regardless of the reason, on a statewide level the demand curve clearly shifted, particularly in the last two quarters. To date, those trends have held through June of 2021."
The demand trend has shifted since COVID.
"In the past, we traditionally have pointed to the population growth of Texas placing high demand on the vast rural areas of the state for both agricultural production and recreational and investment opportunities," stated Bierschwale in the report. "That trend is still relevant in today’s markets, but the added demand of local urban dwellers seeking an outlet outside of the cities has reached a level that has impacted the total demand in a measurable way."
During the first quarter, Texas experienced a surge in transactions as buyers flooded markets.
"Preliminary reports show that statewide volume of sales shot up 33.17% to 8,147 sales," stated Research Economist Charles E. Gilliland, Texas A&M Real Estate Center, in the 2020 report. "Two regions posted greater than a 44% increase in closed sales. This explosion in volume confirms reports of buyers flocking to the country in uncertain times. Bucking the trend, the Far West Texas Region actually sustained a sizable drop in activity (22.61%) as purchases from the oil and gas industry came to a halt, but sales of only mountain properties pushed overall prices to dramatic highs. The torrent of demand, drove statewide prices 9.43% higher than 2019 first-quarter prices, settling at $3,249 per acre. The typical size fell a -21.63% to 1,051 acres. Total dollar volume reached $1.90 billion, closing remarkably close to $2 billion level, up 32.15%."
The report breaks Texas into seven regions and then each region is broken into smaller sub-regions. Land prices and lease rates for various types of property are also provided.
General highlights of the overall regional market are also included. For example, the report states that in Region 3, which encompasses a large area from the Texas-Oklahoma border, on the north, to the Rio Grande and the Republic of Mexico, on the south, prices for farmland and pasture were stable. It continues, "Larger rangeland properties have seen some demand in 2020. This was primarily during the latter part of the year when the effects of the pandemic were mitigated and fears of inflation could have pushed some buyers into the rural real estate market. However, this increased demand did not result in an increase in prices.
"Solar and wind development has continued in North Texas and Central Texas. This is particularly in Knox County. Most of these wind farms are new versus expansion of old farms."
Hunting lease rates are also included. Click here, to view the 2020 report.