Report: Texas Land Markets at the Beginning of 2017

Texas land prices reached a new high in the first quarter of 2017. However, deflated prices have essentially remained rather flat since 2015. These first quarter results indicate that current market dynamics reflect a more measured environment compared to the accelerated growth in 2013–2014. Following the election, observers noticed an uptick in phone calls but not an appreciable increase in transactions.

In the first quarter, prices posted a 1.4 percent increase over fourth quarter 2016 levels. At $2,536 per acre the annual increase over the 2016 first quarter settled at 2.6 percent. Those growth figures document the significant drop off in price growth emerging in the 2015 market. Property size at 1,152.6 acres moved up approximately 12 acres from 2016 first quarter markets. The 5,343 sales moved transaction volume up 354  sales compared with the 2016 first quarter. The real or deflated price settled at $438 per acre in 1966 dollars. These factors document another record setting year throughout the state.

Changes in Texas Rural Land Prices—2000–2017

chart, land, prices

The uncertain environment reflected in the bruising election season along with low commodity prices appears to have impacted markets. At the close of the first quarter, the euphoric optimism following the election has begun to wane. Despite OPEC cutbacks and an uptick in oil prices, petroleum storage totals continue to rise threatening to derail price increases. In addition, supplies of agricultural commodities continue to outstrip demand, signaling weak operating conditions for farms and ranches.

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