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The Western Hill Country also continued to slow down in activity, with signs of weakening prices clearly evident in early 2009. As in other areas, tracts with large volume or exotic-type water seem to continue to increase in value at a steady pace, while the average to below average land tracts owned by needy sellers have begun to retreat, with price competition beginning to become commonplace. Many sellers refuse to bend, and they are learning that most buyers are expecting “deals,” not willing to pay fair market value (except for premier properties). We saw a sale in southern Real County of a marginal water property of 1,300 acres for $1,900/acre (near Reagan Wells). A more improved 1,250 acres near Leakey traded for $3,175/acre, though I think it was an aberration left over from the waning giddiness of 2007. We saw some of that residual in most areas across the board in 2008, but it seems to have pretty much disappeared in mid-2009. Kimble County seems to have hit the wall with cedar-covered hills topping out at $2,000/acre, and retreating slightly in early 2009. This office participated in two live water ranch sales – one in eastern Kimble County, for $3,500/acre for 775 acres – another in western Gillespie County near Harper, for $4,050/acre for 663 acres. This area is now plagued by the prospect of large electric transmission lines passing thru pristine areas, contributing to loss of wilderness, and possibly devaluing the land. Mason County continued to gain momentum and buck trends, with prices continuing to rise into early 2009, as this highly desirable part of the Hill Country begins to get the attention it deserves (which may actually be its undoing). Menard saw a non-live water sale of 2,100 acres for $2,000/acre, which is a new benchmark (the ranch is above average caliber and in excellent condition). Again, as with others, this area is seeing continued appreciation in the top 25% of quality ranches, weakening in the bottom 25%, and the mid-range is holding pretty steady. The distance from Austin & SA is daunting to many, who simply don’t care to drive 2 hours to and back from a recreational ranch in this age of precious time. Those of us who care to (present company included) reap the rewards of solitude, clean water, uncluttered views and financial value.

The Western Hill Country saw a decrease in activity, but a steady rise in prices of closed transactions, as well as smaller average tract sizes. Tracts with big, flowing water or outstanding natural attributes continued to be most desirable, and the City of San Antonio contributed to activity as well with its $90 million budget to protect the Edwards Aquifer recharge zone. A 1,200+ acre parcel near Pipe Creek was split into tracts of about 300 acres each and shopped hard at $4,000/acre with no sales. The Sabinal Canyon saw some medium sized river tracts sell for over $5,000/acre, and divide country to the north with no live water traded for over $2,000/acre. Medina County soared, price-wise, with asking prices north of Hondo along 173 topping $3,000/acre, and a sale of an improved 1,120 acres closer to Bandera clocking in at $4,900/acre. A significant transaction occurred between Leakey & Camp Wood, with a live water ranch of 2,300+ acres closing for almost $4,000/acre. Asking prices of smaller water tracts on Camp Wood Creek topped $7,500/acre during the year. The Frio Canyon saw river tracts topping $150,000/acre in one acre parcels, and rough land off of the river with marginal water topped the $2,500/acre mark, including 1,750 acres that sold for $2,776/acre. The divide country of western Kerr, Real, etc., witnessed a sale of over $2,000/acre for a 2,700 acre tract, while a 1,500 acre parcel on Johnson Creek near Mt. Home was shopped hard for $4,500/acre with no takers. It appears that oak trees, access and condition of the land are the primary value drivers of the divide country, while water strength and flow volume dictate price of water ranches, as always. With proximity to San Antonio, as well as the growth areas of Kerrville and Fredericksburg, the Western Hill Country looms as an undervalued zone for folks willing to drive an extra 30 minutes to an hour for rural peace and quiet.

The Western Hill Country of Kerr, Bandera, Real and Medina Counties surged ahead as typical of the region, with Medina showing an overall appreciation of over 25% for the year. This number is slightly lower for the rest of this zone, but, on the overall, this area remains highly desirable for recreational buyers from the San Antonio area as well as Mexican Nationals. Bandera and Medina Counties are seeing many ranchette-type subdivisions of varying tract sizes, and a sale near Pipe Creek of 1,240 acres in the $2,000/acre range is currently being offered in 300 acre parcels at around $4,000/acre. Live water tracts continued to escalate, and a significant sale of 1,800 acres on the Medina River near Pipe Creek checked in at around $8,500/acre and is currently being developed into smaller residential plots. As the outer reaches of San Antonio expand, higher density developments prevail, and the ranchers who have managed to hold on and put up with the headaches of surrounding development are cashing in their chips, and rightly so. It is the funds from this group of sellers that fuels land markets further out from the major population centers, and it just goes on and on and on. The further reaches of this region saw marginal properties top the $2,000/acre mark, and the larger tracts with big flowing creeks and strong springs are pushing $10,000/acre in the right locations.

The Western Hill Country of Kerr, Real, Bandera and Medina Counties plowed forward with appreciation rates ranging from 15% to 25%. There were several sales in Bandera County of 2,000+ acre creek/spring ranches topping $2,000/acre, with asking prices now approaching $4,000/acre on heavy water places with substantial size. We participated in the sale of the 1,000 acre Greystone Ranch on Turtle Creek south of Kerrville for $5,000/acre. We saw non-water tracts in Medina County top $1,000/acre for the most part, with asking prices on Hondo and Seco Creeks moving over $2,000/acre. A 1,200 acre tract near Pipe Creek languished on the market for $2,100/acre, though its configuration challenges the development market. At the same time, several 100 to 300 acre tracts on strong creeks in the same area sold for over $5,000/acre. We began to see some real separation between ranches with trickling springs and creeks, and those with high-volume flow with unique features such as waterfalls, swimming holes, cypress trees and rock formations. The former showed definite price limitations, while the latter category showed few or none. Guadalupe River tracts above Kerrville have topped $10,000/acre or more, and those near Comfort approached that level. The Sabinal Canyon showed a good surge, with smaller river properties hitting the magical $10K mark, though larger parcels downstream of Utopia still hung in the $2,000/acre zone.

The Western Hill Country showed considerable activity and appreciation, with live water properties leading the way, as always. Eastern Real, Bandera, Medina and Kerr Counties had live water sales of 500+ acre tracts in the $2,500/acre+ range, with cypresslined creeks and rivers pushing $5,000/acre in some cases. Oddly, there were reports of non-water properties selling for less than $1,000/acre in these same counties. Poor access was often a factor in these lower-priced tracts, as was western location (away from San Antonio). Proximity to San Antonio is a major factor, with price breaks occurring at one hour and two hour drive distances. Bandera and Kerr Counties in particular featured riverfront sales of over $5,000/acre, and country subdivisions proliferated in the Medina Lake area. Markets are strong for easily dividable ranchland, as a ready supply of urban buyers looking to commute and/or invest blooms. Spectacular natural water features remain the most sought-after attribute, driving prices into the stratosphere for those rare properties processing them.