SAN ANTONIO (San Antonio Express-News) – Land prices fell 5 percent statewide last year for the first time since the early 1990s, according to data from the Real Estate Center at Texas A&M University.
The decline marked the end of an appreciation run that peeked in 2008, when the median price per acre was $2,359, 330 percent more than the median price in 1994.
Charles Gilliland, research economist with the Real Estate Center, estimates prices dropped to around $2,141 per acre last year and thinks prices will continue dropping in 2010.
“The sellers are anticipating a ‘V'-shaped recovery and that happy days are going to be here again,” Gilliland said. “The potential buyers are saying, ‘Why should I pay this today when I can pick it up cheaper next year?'”
The number of sales fell 37 percent in 2009, as did the size of rural parcels sold. At an average of 70 acres, that’s the smallest amount per sale on record and a sign that buyers can’t afford to commit to bigger tracts.
However, while demand for recreational and subdivision property development has declined, there is still interest in irrigated cropland.
Gilliland said that superior, well-maintained parcels of land are what sell now, since buyers have plenty of choices.
“Buyers haven't disappeared, but they are resisting the prices,” said Gilliland.