A strong 2021 in Texas rural land sales ended with an unexpected whimper.
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End-of-year data from the Texas Real Estate Research Center at Texas A&M University says that though 2021 land sales were overall 17.8% higher than 2020, the fourth quarter of 2021 saw nearly 1,000 fewer sales than Q4 2020.
“Fourth quarter 2020 was crazy. So anything near normal looks pretty calm by comparison," Charles Gilliland, a Texas Real Estate Research Center research economist, said in a release. "The fourth quarter 2021 drop may just be the result of a lack of inventory to sell."
Gilliland said “feverish 2021 demand for land, coupled with a dearth of listings" pushed rural land prices up an unprecedented 29% to $3,954 per acre statewide.
All Texas regions saw double-digit price increases, the center states. The Gulf Coast-Brazos Bottom region, where Houston and its surrounding areas are, reported a Q4 2021 median price of $8.4K per acre, up from $7.9K per acre in Q3 2021.
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Q4 2021 saw 1,283 rural land sales, down from 2,236 in Q4 2020. Land sales overall last year raked in $3.4B, almost 100% over 2020. More than 846,000 acres changed hands, the center says.
“This continues to be the most active period in Texas land market history,” Gilliland said. “The typical tract size sold in 2021 expanded by 14.6 percent to 1,305 acres.”
That Q4 2021 drop isn't a historic low, Gilliland said, noting Q4 2020 was extremely active, with sales up 85% over 2019. Brokers are reporting a lack of inventory, and the surge of demand that saw real estate prices spike is beginning to wane, he said in the release. The market may also be pushing back on high prices.
“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,” Gilliland said. “Some brokers even see activity picking up.”
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