Texas saw an increase in the volume of small land sales for the sixth-straight year in 2018, reaching 8,036 tracts sold or an increase of 5.9% over 2017, according to the 2019 Texas Small Land Sales Report released today by Texas REALTORS®. The total dollar volume of small land sales topped $1 billion for the second year in a row. The average statewide price per acre increased to $5,804.
“The demand for Texas land continues to increase due to strong population and economic growth,” said Tray Bates, chairman of Texas REALTORS®. “Development and prime land investment opportunities remained a steady force, increasing the price per acre and impacting the quality of land available. Overall small land sales in 2018 experienced strong growth, particularly in West Texas due to a surge in oil and gas production and in the Gulf Coast area due to recovery activity from Hurricane Harvey.”
The definition of a “small” land sale varies by region but is generally a land sale of 200 acres or less. The exception is Far West Texas, where 500 to 8,000 acres qualifies as a small land sale.
The number of small land sales grew by double-digit rates in the West Texas, Gulf Coast-Brazos Bottom and Austin/Waco/Hill Country regions but fell in the Panhandle and South Plains, Northeast Texas and South Texas. The Panhandle and South Plains and the Gulf Coast-Brazos Bottom average tract sizes grew 29% and 5.5%, respectively, while the statewide average tract size for small land sales decreased 8.3% to 33 acres.
“Statewide, smaller properties are growing in popularity with many being purchased as an expansion of a larger property, especially in sub-markets right outside of the large metro areas,” said Charles Gilliland, Ph.D., economist with the Real Estate Center at Texas A&M University. “With housing prices increasing statewide, there is demand for more subdivision developments, and, thus, more tracts are being purchased for pre-development.”