Texas Land Markets: Post Remarkable Recovery from the COVID Pandemic

Second Quarter 2020

In the third quarter, most Texas land markets launched a remarkable recovery from the double blows inflicted by the COVID virus shut-down and plummeting oil prices. After suffering through a moribund second quarter, the 2020 third quarter preliminary number of sales dropped only 2.9 percent from 2019. Final numbers may meet or exceed 2019 levels. The current total decline amounts to  approximately one third of the decline posted in the second quarter. 

Statewide prices at $2,977 per acre inched up 1.95 percent above the 2019 price and 1.64 percent higher than the second quarter price. The number of acres sold dropped 19.32 percent from 2019 levels. That compares to a second quarter retreat of 23.49 percent. Total dollar volume slipped 17.75 percent to $1.2 billion, marking some recovery from the second quarter annualized drop of 22.16 percent. Typical transaction size remained nearly steady with a 1.60 percent decline to 1,183 acres. Overall, the preliminary third quarter results show that Texas statewide land markets posted encouraging results considering the massive negative forces afoot in the second quarter.  

Panhandle and South Plains: Prices continued to ebb in this market with preliminary third quarter prices retreating 7.38 percent, a larger decline than the second quarter result. Observers suggest that an increase in the number of grassland sales may have contributed to this price drop. However, at $1,117 per acre, this price may have begun to reflect weak fundamentals in agricultural products markets as well as collapsing oil prices. The number of sales dropped 21.86 percent to 336 transactions while total dollar volume also fell 36.17 percent to $60.4 million. The retreat in activity signals weakened market conditions. Size declined 9.28 percent to 376 acres while total acres sold dropped a substantial 31.09 percent to 54,047 acres. These negative indicators continued trends that emerged in the first quarter.

Far West Texas: Land markets in this region have reflected the boom in oil prices and petroleum production for the past several years. Development of the Permian Basin drove prices to unprecedented levels. Collapsing oil prices and the COVID virus negative impacts combined to weaken industrial inspired demand for land in the third quarter. The preliminary regional price retreated to $402 per acre dropping 50.92 percent from 2019 prices. In addition, total dollar volume fell 84.85 percent to $13.7 million. The number of sales fell 62.12 percent to a mere 16 transactions while size decreased 10.50 percent to 8,314 acres. Markets appear to be returning to pre-oil boom conditions.  

West Texas: Buyers from the prosperous Dallas/Fort Worth area migrated into this region searching for recreational and investment opportunities. This increase in demand drove up prices in the eastern counties of the region. At $1,711 per acre, prices rose a strong 12.20 percent. However, the sales volume dropped 12.58 percent to 570 sales. The typical size fell 4.56 percent to 391 acres. Driven by the higher prices, total dollar volume at $116.8 million increased 6.72 percent. At 68,286 acres, total acreage dropped 4.88 percent. Weaker sales activity with rising prices suggests buyers concentrated on higher quality properties. 

Northeast Texas: Prices rose throughout this region from Fort Worth on the west through the Piney Woods along the Louisiana border. The regional preliminary price rose 4.98 percent to $4,865 per acre. However, the number of sales fell by 10.80 percent and total dollar volume fell 11.53 percent to $266.5 million. The size of transaction grew 4.54 percent to 121 acres. Total acreage sold declined 15.73 percent, falling to 54,783 acres. These market developments reflect a strong performance in the face of the ongoing pandemic.  

Gulf Coast – Brazos Bottom: Perhaps reflecting the importance of the oil and gas industry to Houston buyers, activity in this region slowed slightly in these preliminary findings. Total dollar volume dropped by 6.63 percent to $212.3 million and the number of sales declined as well, falling 7.07 percent to 684 transactions. Regional price rose 3.89 percent to $6,435 per acre despite the deteriorating activity indicators. The typical size remained little changed at 0.71 percent settling at 148 acres. The magnitude of the negative indicators eased in the third quarter from more sobering results in the second quarter. 

South Texas: South Texas market prices continued to improve in the third quarter, settling at $3,836 per acre, up 1.97 percent. Those results mark the third quarterly price increase since the third quarter of 2019. Size also grew, rising by 9.14 percent to 286 acres. However, total dollar volume dropped 17.72 percent to $142.7 million. At 445, the number of sales slipped 27.17 percent. 

Austin – Waco – Hill Country: In spite of coronavirus developments, central Texas markets continued to prosper in 2020. Although prices rose a meagre 1.53 percent to $4,044 per acre, most market indicators remained positive despite the headwinds imposed by the coronavirus. In addition, total dollar volume remained nearly steady, increasing by 0.82 percent to $356.6 million. The number of sales also expanded to a 5.04 percent increase at 1,688 sales. Size remained virtually unchanged with a 0.17 increase to 212 acres. Total acres sold dropped 0.70 percent to 88,184 acres.

Third quarter developments reflected the turbulence of roiling economies and societies plagued by the coronavirus. The unprecedented cessation of economic activity enacted a toll throughout Texas and the southeast as numbers of transactions contracted as did total dollar volume. In normal times, those negative developments on a broad front would signal emerging weakened conditions. However, the economic environment has radically changed from the first quarter. Currently, market professionals report a noticeable uptick in interest with increased inquiries. In addition, internet views of the rural land area of the Real Estate Center website spiked up 63 percent in the past month. 

Texas Rural Land Prices 2010–2020
Changes in Texas Rural Land Prices 2010–2020


  • DR. CHARLES GILLILAND currently holds an appointment as a Research Economist with the Real Estate Center in the Mays School and an appointment as Adjunct Associate Professor of Agricultural Economics at Texas A&M University. In addition, Dr. Gilliland is Helen and O.N. Mitchell Fellow of Real Estate and a Clinical Professor of Finance teaching real estate investment analysis for the Master of Real Estate program in the Mays School at Texas A&M University.

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