June 02, 2014 — Austin
From vacation homes and ranchettes to investment properties and industrial interests, small land sales throughout Texas saw significant activity last year, according to the 2014 Texas Small Land Sales Report released today by the Texas REALTORS®. The report summarizes data provided by the Real Estate Center at Texas A&M University on trends in small land sales across the state and revealed that the economic strength driving other aspects of Texas real estate is also reflected in small land sales.
According to the report, 2013 featured 4,189 small land sales in Texas of a median tract size of 20 acres. As the first year of the report, year-over-year comparison data is not yet available. However, in comparing these figures to long-term trends, it’s clear that individual buyers, investors and industry are driving an increase in sales for these types of properties.
Dan Hatfield, chairman of the Texas REALTORS®, commented: “The same things driving demand for residential real estate—jobs and affordability—are driving small land sales in Texas. Texans are looking for vacation properties, industries are looking to support their operations and investors are looking for new development opportunities. Over the last decade, that has driven almost double the number of land purchases.”
According to the report, individuals are showing more interest in small land sales for recreational uses, such as ranchettes for weekend getaways and land for hunting. Industries are purchasing tracts known for timber production as well as farmland with an abundance of silage. Small land sales were also driven by investors, who are seeking irrigated land for cash crops that are beginning to stabilize in price and in the fringe counties of major cities for community development.
Charles Gilliland, economist with the Real Estate Center at Texas A&M University, spearheaded collection of the data and commented on the importance of looking at small land sales specifically, “We’ve long suspected that trends in land sales may differ between small and large tracts and the findings in this report confirm that. Few buyers possess the resources required to purchase large tracts while many more have the capital needed to buy smaller properties. This higher demand often results in small properties exchanging for a higher price per acre than larger neighboring tracts of comparable quality.”
The report divides the state into seven regions and reports on trends in each. Due to the significant physical variations among these regions, the definitions of “small” and “large” have been determined on a per-region basis. Generally speaking, however, a sale is considered a small land sale if the purchase is less than 200 acres. The exception is Region 2, covering Far West Texas, in which 500 to 8,000 acres qualifies as a small land sale.
Among the regions, Region 7(Central Texas) had the most land sales in 2013, with 1,392 parcels of small land sold, comprising 33% of the total volume in Texas. In addition, Region 5 (Houston and surrounding areas) had the highest average price per acre in Texas at $9,195, while Region 1 (Panhandle) had the highest median tract size, at 81 acres.