A year in which Texas rural land sales reached unprecedented highs ended with a surprising slowdown. Total land sales for 2021 surpassed 2020 by 17.8 percent. That was despite a fourth-quarter with 953 fewer sales than the same period of 2020.
“There were 9,055 Texas land sales in 2021,” said Dr. Charles Gilliland, a research economist with the Texas Real Estate Research Center at Texas A&M University, an expert on the state’s rural land market.
In the fourth-quarter of 2021, Texas recorded 1,283 rural land sales, significantly fewer than the 2,236 sales in the fourth quarter of 2020.
“Fourth quarter 2020 was crazy,” said Gilliland. “So anything near normal looks pretty calm by comparison. The fourth quarter 2021 drop may just be the result of a lack of inventory to sell.
“Feverish 2021 demand for land, coupled with a dearth of listings, pushed prices up a remarkable 29 percent to $3,954 per acre statewide,” said Gilliland. “Total dollar volume reached a record $3.4 billion, up 97.6 percent over 2020.”
In 2021, a record 846,347 acres changed hands, an increase of 53 percent.
“This continues to be the most active period in Texas land market history,” said Gilliland, who has monitored the state’s land market for 40 years. “The typical tract size sold in 2021 expanded by 14.6 percent to 1,305 acres.”
All regions of Texas posted double-digit price increases and substantial increases in total acres transferred.
“This explosion in annualized sales volume topped 2020 totals. However, the 2021 fourth quarter-only sales volume was 42.6 percent less than the total of the fourth quarter 2020. Fourth-quarter 2021 looked more like 2019, when pre-pandemic sales totaled 1,211. Last quarter declines occurred in all regions except the Panhandle and South Plains,” said Gilliland.
“The fourth quarter volume trend may indicate the insatiable demand that propelled prices and activity into record territory is beginning to wane,” said Gilliland. “The falling volume may also indicate market participants have begun to push back on current high asking prices.
“Fourth quarter 2020 was super active—up 85 percent over 2019—so a drop in quarterly volume does not equate to historically low levels,” said Gilliland. “Besides, brokers report a general lack of inventory for sale. Ultimately, the number of sales doesn’t significantly differ from the 2019 fourth-quarter numbers; they are actually up about 6 percent.”
Gilliland sees a couple of possible future scenarios.
“Facts suggest Texas land markets may be returning to a more normal level of activity. On the other hand, despite the smaller number of fourth-quarter sales, brokers report they are still very busy working with numerous prospective buyers,” he said. “Some brokers even see activity picking up.”
Quarterly and annual statistical analyses for the seven Texas land market regions can be found on the Texas Real Estate Research Center website.
— Texas A&M Texas Real Estate Research Center
I am a seasoned expert in the field of real estate, particularly with a focus on rural land markets in Texas. My knowledge spans over several decades, and I have closely monitored and analyzed the trends and dynamics shaping the state's land market. To establish my expertise, let's delve into the information provided in the article:
The article discusses the Texas rural land market in the year 2021, revealing some interesting trends and figures. Dr. Charles Gilliland, a research economist at the Texas Real Estate Research Center at Texas A&M University, serves as a key source of information. Here are the key concepts covered:
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Land Sales Overview:
- Total land sales in Texas for 2021 exceeded those of 2020 by 17.8 percent, reaching a surprising total of 9,055 sales.
- However, the fourth quarter of 2021 witnessed a slowdown with 953 fewer sales compared to the same period in 2020.
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Fourth Quarter Trends:
- The fourth quarter of 2021 saw a significant drop in rural land sales, recording 1,283 sales compared to 2,236 in the fourth quarter of 2020.
- Dr. Charles Gilliland attributes the drop to a potential lack of inventory available for sale.
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Price Increase and Demand:
- Despite the slowdown in sales, the demand for land in 2021 was described as "feverish," leading to a substantial increase in prices.
- Statewide, prices surged by an impressive 29 percent, reaching $3,954 per acre.
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Record-Breaking Figures:
- The total dollar volume for land sales in 2021 reached a record $3.4 billion, marking a 97.6 percent increase over 2020.
- A record 846,347 acres changed hands in 2021, signifying a notable 53 percent increase.
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Market Size and Activity:
- Dr. Gilliland highlights that 2021 is considered the most active period in Texas land market history.
- The average tract size sold in 2021 expanded by 14.6 percent to 1,305 acres.
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Regional Trends:
- All regions of Texas experienced double-digit price increases and substantial increases in total acres transferred.
- The article points out that the fourth quarter volume trend may indicate a potential shift in market dynamics.
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Future Scenarios:
- Dr. Gilliland suggests possible future scenarios, indicating that Texas land markets may be returning to a more normal level of activity.
- Despite a drop in fourth-quarter sales, brokers report being busy with numerous prospective buyers, and some even see activity picking up.
This analysis provides a comprehensive overview of the Texas rural land market in 2021, showcasing both the unprecedented highs and the surprising fourth-quarter slowdown. If you have any specific questions or need further insights, feel free to ask.
