Territory Review 2005

Southwest Texasland values held mostly steady, though properties with live water continued to appreciate in value.Kinney and EdwardsCounties saw quite a bit of subdivision activity, particularly the area north of Bracketville towards CartaValley.An abundance of 200 to 500 acre tracts were available in the $450/acre range with some sales recorded.Tracts over 5,000 acres moved for $325 to $400 depending upon accessibility, tree cover and improvements.Uvalde, Real and KimbleCounty saw slight gains overall, with live water properties again leading the way.A recent surge in Kimble County values seems to have leveled off in 2004, with live water tracts of 500 acres topping out at $3,750/acre for “big” water (Llano River, Johnson Fork), $2,000/acre for lesser water (Bear Creek, etc.)The NuecesCanyon has seen some river ranches sell for over $1,500/acre, while there were several creek properties topping $1,000/acre.Dryland tracts of 500+ acres east of Uvalde have topped the $1,000/acre mark, with irrigated and/or riverfront pushing $1,750/acre.The FrioCanyon has seen another wave of riverfront developments, and it has become next to impossible to find 100 acre+ river parcels for sale at all.

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 cypress-lined 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 KerrCounties in particular featured riverfront sales of over $5,000/acre, and country subdivisions proliferated in the MedinaLake 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.

The Central and Eastern Hill Country showed the most activity, with several eye-popping sales in Kendall and HaysCounties.Most notable was the much-discussed series of sales of the 5,000+acre “Broken O” Ranch in the hills west of Boerne.This fabulous remnant of the former “Seven Eleven” Ranch features fire-hydrant springs, sizable lakes, spectacular scenery and remote accessibility.The final sale was said to exceed $7,000/acre, with the property supposedly earmarked for small tract residential development of the upscale variety found in steadily growing Cordillera Ranch to the east.Another remarkable transaction occurred just east of Wimberley, with the “Cougar Bend” Ranch of 421 acres on the BlancoRiver selling for a reported $22,000 per acre.This property does have a fine home which contributed about $4,000/acre to value.Blanco County saw several strong water ranches sell for $4,500 to $5,000 per acre, including the successful purchase and resale of the 2,100 acre Clear Rock Ranch near Henly by us, with resale water tracts of 400+ acres averaging $4,600/acre.Our group also closed out the 50 to 100 acre tract division of the former Nagle Brothers ranch of 800 acres near Dripping Springs, averaging $6,000/acre for the parcels, none having live water.Due to minimal regulations, BlancoCounty is seeing a proliferation of 25 acre tract subdivisions marketed to commuters/investors from both Austin and San Antonio, with mediocre sales success reported at $7,500 to $8,000/acre.Proximity to the US Hwy. 281/290 corridors seems to be a key to success for this type of development.1050 acres on 281 south of Johnson City sold for $2,800, while an improved 1,000 acres closer to Blanco fetched slightly more. Guadalupe River 500 acre tract values are running in the $8,000 to $10,000/acre range, depending upon location, with the BlancoRiver doing about the same, though it spikes closer to Wimberley.Non-water tracts north of CanyonLake can still be found for $3,500/acre in both Comal and BlancoCounties.PedernalesRiver from Fredericksburg to LakeTravis runs from $6,000 to $10,000/acre, and any live water land within 15 miles of Fredericksburg is hard to find for less than $7,500/acre.As always, cypress trees seem to add about 20% to value of water properties, as do deep swimming holes and 3+ foot high waterfalls.Large, permanent-flowing springs are at a premium as well, especially when the water flowing from them stays on the site for a significant distance.500 acre tracts in this zone with a permanent flowing creek should fetch $4,500/acre and up, depending upon flow volume, location, topo and improvements.This number could reach as high as $10,000/acre for the most choice areas and unusual parcels.

The Inland Plains area of DeWitt, Gonzales, Caldwell, Karnes and Guadalupe Counties showed steady gains, but not of the spectacular variety of the Central Hills.A shortage of larger parcels was evident throughout the year, with only a couple of sales of 1,000+ acre parcels reported.This includes the 2,200 acre Peach Creek tract in NE Gonzales County selling for $915/acre in early spring, then having 1,500 acres split off and resold for $1,400/acre in the fall.This property has outstanding tree cover with extensive road frontage, and is regarded as above average with marginal minerals.Demand for 75 to 250 acre parcels remains strong, with prices of $1,300 to $1,600/acre being the norm.Significant minerals can add up to $200/acre to value in these areas.Several low-lying Guadalupe & San MarcosRiver ranches in the 500 acre range changed hands in the $1,400/acre bracket.% of flood plain is a major value factor, as is tree cover.Lowlands with no trees are hard to sell, and rolling, wooded lands fetch top prices and sell quickly.Rolling, open properties stay on the market longer, even though there is a fairly strong supply of ag-type buyers with low interest money to spend.Another price driver in this region is lakes/lake sites, as creeks and rivers usually create a large % of “boggy” country.Sizable lakes offer recreational potential for fisheries, waterfowl and boating, not to mention water and jet skiing, minus the problem of flooding.Overall, this zone will continue to see a shortage of large parcels available for purchase, but when they do hit the market, they should sell quickly for $1,100/acre to $1,500/acre, depending upon access, location, minerals and tree cover.

Upper South Texas, like the inland plains, showed steady gains as well in 2004.Large wooded recreational parcels were in short supply, though there were several large working cattle ranches shopped round throughout the year.These mostly-ag properties are selling for $1,200 to $1,500 per acre, depending upon location and improvements.This zone seems to favor ag-type tracts more than any other, probably because soil conditions, on the overall, are among the strongest in all of Texas for cattle grazing, dryland and irrigated farming.ChoiceMedinaCounty irrigated farmland is selling for $1,800/acre and up. Unimproved brush land in the same area is 20 to 25% less.Low interest rates available to ag producers is fueling these sales, though the hunters remain a strong buying segment as well.KarnesCounty finally showed some strong value increases, as it has been a “sleeper” for the past several years.It is now difficult to find anything in that county for less than $1,000/acre, though two years ago you could buy all you wanted for $750/acre.

AtascosaCounty, due to its proximity to the new Toyota Plant, has experienced a “mini-boom” in recent months.Many small acreage tract subdivisions are springing up in both it and WilsonCounty, creating uncomfortable rapid growth for these relatively unsophisticated populations unused to hoards of commuters racing down the dusty country roads.500+ acre tracts in these counties with trees, paved frontage and minerals are rarely found for less than $1,000/acre, though there was a confirmed sale in NE Wilson County of $780/acre for a 170 acre tract with trees, county road frontage and minerals.

In summary, it is apparent that Central Texas has been and will continue to be a hotbed of real estate activity due to its interesting variety of cultures and geography, mild climate, proximity to Mexico and the GulfCoast, growing metro areas of Austin and San Antonio plus a labor market that is among the most cost-effective in the country.Austin is showing signs of recovery from the high-tech collapse, while San Antonio is flexing its muscles with the Toyota site, SBC’s expansion and the PGA project.Satellite cities such as Boerne, Dripping Springs, Seguin and San Marcos are exploding, while at the same time learning to cope with rapid growth pains.

We believe current trends should continue through 2005, though “cashing in the chips” might be a wise decision for landowners in certain areas whose land is a significant family asset.It would be our recommendation that those landowners, particularly ones in areas that have seen the most dramatic recent increases, to shift their gain into lands a little “further out” from metro areas and wait for the next “wave” of appreciation.There are many exceptions to this report, and prices within an area can vary tremendously depending upon factors already mentioned.We welcome new factual data and your opinions and encourage you to stop by and visit our new office in The Falls, several blocks east of South Main behind Beall’s.We hope you will consider our professional services if the need arises and wish you and your family a safe and bountiful 2005 and beyond.