Written by Charles E. Gilliland, PhD
Most of Texas land remains native range with an additional acreage in improved pasture. Strong recreational demand and oil field activity somewhat insulates rural land prices from conditions in the agricultural economy. At $2,729 per acre, Texas land prices continued to climb at a solid pace in the third quarter of 2018. Energy sector inspired demand drove the statewide price up 5.82 percent over third quarter 2017 levels. That was the strongest annualized growth since 2015. However, the volume of reported activity at 5,629 sales retreated 9.27 percent from the 2017 volume. That coupled with a drop in total dollar volume sends warning signs of possible future price weakness. Overall, Texas statewide land markets continued to thrive with these positive price trends.
However, the Panhandle and South Plains region, dominated by production agriculture, produced decidedly weak results. Overall prices continued to slide significantly in that area. Booming oil exploration and production pushed land markets prices higher as industrial uses continued to dominate ranch purchases. Northeast Texas markets continued to enjoy very strong price growth despite weak timber prices. South Texas, posted more modest results. The Hill Country and west Texas rose slightly while the Gulf Coast remained flat.