Territory Review 2016

Southwest Texas saw a decrease in sales activity over the period, with fewer “epic” sized ranches being taken down, though there was still a steady flow of mid-sized to small sales.The slowdown of the petro sector has a lot to do with this, as does the current neutral status of the beef industry, still a bit giddy after a splendid 3 year run.We view this region as having excellent value at all times, with proximity to San Antonio and the Hill Country, with the only real risk associated with land on or very near the Rio Grande River or its major tributaries.

Val Verde County saw a trickle of mid-sized to smaller sales in the period.A 5,925 acre Comstock hunter checked in at something below $400/acre, after being on the market for 2.5 years.Another 5,407 acres offers a stark lesson in the reality of the economics of sub-$50 oil.This one was listed for $4.2M in late 2013, and sold for $2.3M in mid-2015, being $424/acre, and having good improvements and dry Devil’s River just above the big springs.Yet another Val Verde example of harsh reality comes from the sale of a 3,706 acre Comstock hunter on pavement in spring, 2016.This tract started at $2.95M in late 2013, and ended up at $1.65M in 2016, being $444/acre.That is not good, folks!

Val Verde still shows big river ranches floating on the market, all the way from $685/acre up to $1,961/acre, many having been on the market for years, now.There is simply no way we’re going to see 10,000 acre tracts on the Rio Grande or Pecos Rivers trade for over $500/acre with sub-$50 oil.Presently, the cheapest dryland offered in Val Verde County on landsoftexas.com is $405/acre, and few minerals are available in this county any longer.

Edwards County saw very little activity in the period, with only two period sales appearing on the first page of the landsoftexas.com sales data section.An 1,802 acre, average-type hunting parcel west of Rocksprings checked in at something less than $1,450/acre, while a pretty nice 2,412 acres on the dry West Nueces River checked in at $1,025/acre.The lackluster petro sector will continue to cause this zone to stagnate, though there will always be live water opportunities at high value here, as there always have been in the past.The 6,378 acre portion of the Cedar Springs Ranch has been reduced to $2,100/acre from $2,400/acre, a significant reduction, yet no sale is imminent.The 2,000 acres on the Nueces River at Camp Wood remains unsold at $5,000/acre, and has been on the market now for nine years.Talk about determination!Most dryland offerings in the county are in the range of $1,200 - $1,600/acre, with some good live water available at or near $2,000/acre, sometimes with a portion of the mineral rights.

Medina County saw a few mid-range sales of note, but nothing of epic proportions like we were seeing several years ago.An improved, high fenced showplace near Castroville checked in at a stout $5,670/acre in April, 2015, while an improved hay-factory near Devine checked in at $2,850/acre.The history of this offering is noteworthy in that it started out at $3.48M in February, 2014, and ended up at $2.475M on February, 2015.Again. . . not good.We had an improved but remote 971 acre hunter between Hondo and Bandera check in at $2,500/acre, right where it’s supposed to be.Somebody learned a lesson on this one, as it started at $3.74M in March, 2015, yet ended up at $2.43M on 6/16. . . ouch!Again, Medina County is tied very closely to the Eagle Ford, and when petro is down, ranch sales activity fades.Like last year, the asking prices of the 15 largest offerings in the county on landsoftexas.com are simply ridiculous, with only one offering asking less than $3,000/acre, and numerous ones over $6,000/acre.The continuing rise of San Antonio will send a few fancy buyers out this way, but only when oil gets back to $100 will the $6,000/acre deals start happening again, with the aforementioned Castroville sale the exception.Watch for the continued presence of Chronic Wasting Disease in this county to become a possible game-changer!

Sutton County had several mid-range sales in the period, but nothing ginormous.An improved 2,617 acre hunter almost in Edwards checked in at something less than $1,694/acre in February of this year, while an unimproved 4,264 acre hunter almost in Val Verde County checked in at $699/acre.Another unimproved 2,823 acre hunter near the Crockett line checked in at $785/acre in July, 2015.Sutton County remains heavily under the influence of the Permian Basin, as well as its own significant oil and gas production.Watch for land without minerals here to get back to $500/acre if oil stays down much longer, and if the wind farms continue to creep eastward.

Uvalde County backed off from a torrid 2014 to only show a couple of mid-sized sales in the period.An unimproved 2,894 acre hunter north of Uvalde checked in at something less than $1,710/acre in December, 2015, while a commercial 724 acres near Concan on the highway checked in at something less than $4,600/acre.Of the 15 largest offerings on landsoftexas.com, the lowest asking price currently is $1,595/acre for the 5,000+ acre Lake Creek Ranch, which appears to be a pretty solid deal!We will keep an eye on this one over the summer, as it will be a bellcow for the future if it does, in fact, actually sell.

Real County saw a high fenced 647 acre hunter move at $2,125/acre in January, 2015, while in Kinney County, an improved hunter checked in at $1,450/acre.Kinney saw 8 sales make the first page of landsoftexas.com in the period, none above $1,753/acre.The presence of anthrax continues to be a negative here, as does the proximity to the Mexican border.

The Northwestern Hill Country and Rolling Plains saw reduced activity during the period, no doubt directly related to the Permian and Eagle Ford slowdowns.Smaller, higher quality parcels continue to trade steadily, seemingly without regard for what’s going on around them.How long this trend might continue with sub-$50 oil is anyone’s guess.

Mason County, recently sizzling with multiple $3M+ transactions in a given year, checked in with one really significant sale during the period, that being the sale of the 1,300 acre Granite Springs Ranch, on the McCulloch County line.This tract was attractive, with scattered cover of oaks and a few nice fields, combined with granite outcrop country boasting several live springs with minor pecan bottoms.This tract ended up selling for $2,634/acre, and was somewhat adversely affected by a nearby proposed frac sand plant.Mason County citizens are pleased to announce the withdrawal of the proposed ENEL wind farm in the NW part of the county.This was a major victory by a well-organized and financed local opposition group, the THCHA, and is the third anti-industry initiative in the region successfully championed by them.

There is little question that the presence of wind turbines, large electric transmission lines and other visible industrial-related nuisances devalue nearby lands, particularly in the pristine areas of the Texas Hill Country.This office continues to work diligently in the direction of gathering factual data to support this conclusion, and hopes to achieve success in courtrooms near you through our expert witness and consultation services.We are always open to new data and ideas.

This office remains the all-time leader in significant Mason County closed ranch sales by a wide margin, having 7 of the 9 largest sales ever recorded since the inception of the landsoftexas.com comp program in 2007, including the largest ever of $14.8M when we represented the seller of the present McHale Ranch, west of Mason.

Menard County is another that slowed considerably from recent success, with this office being responsible for the only two sales over $2M during the period, both on the San Saba River, both with an easement thru cutting off the river frontage.These were slightly above average quality tracts of land with permanent river frontage, that checked in at $2,145/acre and $1,965/acre, for 1,030 acres and 2,100 acres, respectively.Sales over $2M since 2007 have fallen in the range of $1,157/acre to $2,428/acre for ranches with non-extraordinary improvements, and the cautious trend seems to be holding steady into the latter part of 2016.It’s a long, hot summer, but early rains should keep the rivers and big creeks going into fall.

Kimble County saw a couple of small to mid-sized hunters check in at $2,696 - $3,650/acre, both improved/above-average kinda places.Presently on Landsoftexas.com, asking prices range from $1,950/acre to $4,750/acre for native rangeland to improved live water property, with this office putting out a particularly nice 744 acres to lead the high side.Kimble remains a viable, affordable alternative for those who can handle the extra hour’s drive past Kerrville, especially with the recent 80 mph speed limit on I-10.

McCulloch County saw 3 sales in the period of improved, mid-sized ranches, with prices ranging from $3,100 - $4,000/acre.There have been recent large sales in the $20M range, and now the massive Ford Ranch is being offered for sale, being 31,778 acres @ $1,887/acre = $60M.This bruiser is burdened by a groundwater agreement with the City of San Angelo, so it will be curious to see how marketable it actually is in the present economic climate.McCulloch sellers seem unreasonably optimistic, with no asking price less than $2,995/acre on present offerings over $3.2M other than the Ford, and somewhat insane or asleep at the switch as well, as the proposed Rattlesnake wind farm project in the Brady Mountains is said to be eminent by local sources.YIKES!!!

San Saba County held steady in the period, with the slightly closer proximity to sizzling Austin being a factor in that steadiness as opposed to its neighbors to the west.A benchmark sale of the 574 “Eagle Eye” Ranch, west of Cherokee, checked in at almost $13,000/acre with dazzling and extensive improvements in an exquisite, private setting.Another solid sale of a 1,000 acre, high fenced hunter on the McCulloch line checked in at $2,643/acre, not bad for “slow” times.San Saba remains an intriguing location, with much scenery and little development, and solid folks.

Concho County only saw one sale in the period, being a nice 454 acres near the Menard line, checking in at $2,087/acre.This is a slowdown from previous years, in which there were 2-3 sales/year checking in at over $1M.The lowest sizable recent sale we see is $1,150/acre in this county, though one checked in at $896/acre in 2009.

Runnels County saw a meaningful sale of 1,115 acres on Mustang Creek and the Colorado River for something less than $1,895/acre, with other smaller sales checking in at $1,250 - $1,600/acre, which seems to be the legitimate area value range.Liveoak trees are important here, mesquite takes you down to the low end of the range at best.A muddy river lined by mesquite, elm and a few oaks just ain’t enough to excite the Austin or Ft. Worth crowd.

Burnet and Lampasas Counties are old haunts that are now being brought back in to our territory.We saw an odd-shaped 518 acres with commercial potential near the 281/71 intersection trade for $8,000/acre on 5/27/16 , and the same parcel traded for $6,335/acre on 8/17/15.This, folks, is what you call a flip.Only around 281/71 does this happen consistently these days.Lampasas County, on the other hand, showed 5 sales over $1.3M during the period, impressive indeed, with the sale of the 852 acre Little Bear Ranch on the Lampasas River leading the way at $3,400/acre on 7/01/16.

The Central, Eastern and Southern Hill Country remains fairly steady due to the proximity to Austin and San Antonio, two of the hottest growth centers in the USA.The area just west of Austin, in particular, has exploded with sales of small tracts 10 – 50 acres.If Onion Creek was getting drier, watch out now, and to add to that, the City of Dripping Springs wants to dump more raw sewage into it!How quickly things change.

Hays County saw several sales during the period, including the second sale of the 1,558 O Bar Ranch near Driftwood, for $8,020/acre.This parcel traded in 11/13 for $6,482/acre, and is restricted to subdivision into nothing more than 15 – 100 acre parcels.With one exception, there are no listings on landsoftexas.com at this time in Hays less than $10,000/acre, regardless of size.Look for the upcoming offering of the 2,500+ acre El Rancho Cima on the Blanco River near Wimberley to be an indicator of just how marketable Blanco River frontage is after the disastrous flooding of 2015.Note that this office maintains the largest recorded sale in the county on landsoftexas.com, having 3 of the top 15 on that site.

Blanco County saw several sales in the period, led by the sale of the long-offered 831 portion of the Robinson Ranch on Cypress Creek, which checked in at somewhere below $11,500/acre.This is big, cypress-lined water on pavement with solid improvements, less than 45 minutes from Austin.The recent sale of the WKL Ranch just west of Blanco checked in at something less than $8,750/acre.This is a nicely improved showplace, no live water, but great location on pavement minutes from town.This county continues to slowly be absorbed into Austin and San Antonio, and prices continue to escalate accordingly.

Kendall County saw multiple sales in the period, ranging from $12,100/acre to $33,000/acre, and sizzling Boerne continues to appreciate at a rapid rate.At this writing, there are still public offerings at under $5,000/acre in the county, but not in Boerne Schools, nor prime quality land.This office continues to lead the pace in county-wide sales over $2.5M on landsoftexas.com, with a total of five, two more than the nearest competitor, in the all-time standings.Keep an eye on our current juicy listing, Dunner’s Mountain Ranch, to attract attention the latter part of this year into 2017.This 3,160 acre juggernaut is one of the last undeveloped parcels of its size within 35 miles of San Antonio, and is reasonably priced at $5,450/acre only a few miles north of enchanting Sisterdale.

Gillespie County, seemingly immune to the oil patch woes, showed 4 sales of over $2.7M during the period, ranging from $3,894/acre for Harper dryland to $18,100/acre for a highly improved, live water showplace.This dynamic market continues to amaze, as the US 290 wine corridor is being built up beyond belief, and “the Burg” has become quite THE retail and wine destination indeed!LANDTX continues to hold on to two of the top three sales in the history of landsoftexas.com comps for this county, and enjoyed its brief stay at the old West Live Oak Street location in Fredericksburg.

Kerr County showed a “normal” activity pattern this period, with one sale of 5,000 acres near Hunt achieving $2,418/acre after 14 months of exposure at $3,250/acre (74% of asking price).This high fenced divide property is on the edge of the breaks to the south, and actually has a couple of canyons with seeps, along with highway frontage on 39.This office engineered the sale of the 293 acre Spring Lake Ranch, on strong springs on Tomas Creek, with a deep, wide constant-level lake and lodge, for $9,545/acre, after 1 ½ years exposure.Another relevant divide sale was the 1,353 acre east pasture of the Faulkner Ranch, in August, 2015.This tract was well-configured, nicely improved with multiple cabins and manager’s home, paved interior roads, and high fenced with well-managed whitetail and axis herds, and achieved $2,793/acre, a solid benchmark for the area.This office continues a strong presence in Kerr County, accounting for 2 of the 9 largest sales recorded on landsoftexas.com since its inception in 2007.

Llano County saw steady activity in the period, as the upper Highland Lakes continue to sizzle, and serious commercial infrastructure begins to radiate out from the 281/71 epicenter.The two largest public sales in the history of the county occurred in the period, but both were confidential and posted information is not accurate.An 841 acre tract on the Llano River east of Llano achieved $6,843/acre on 10/15, while a 1,363 acre parcel, also on the river nearby, checked in at $5,292/acre.Smaller river parcels are topping $10,000/acre routinely, and the lowest asking price presently on landsoftexas.com first page is $3,350/acre for dryland.

Bandera County showed 4 sales in the period over $2M each, ranging from $4,229 - $6,762/acre, all with either good live water and/or improvements.At present, however, there are only two listings over $4M in the county on landsoftexas.com, that are less than $7,943/acre. . . talk about optimism.There are a number of fancy showplaces on the market in Bandera County at this time, perhaps more than ever seen, as there are presently 30 ranches on the market in the county for $2.95M or more.

Comal County shows steady activity, but virtually all land sales are of the commercial variety at this time, many getting up around $1/square foot.

The last 7 months of this period have been the slowest, sales-wise, this office has seen since the 1990’s, and I’m not kidding.Things have picked up a bit here in mid-July, but still have only one closed sale for the year, with one additional in the title company.Of course, this is due to muddled mindsets in our great State, directly tied to sub-$50 oil.This is also not to mention that this office is the only office in the State to receive the prestigious LandStar Award now two years running for outstanding sales performance, so we’ve got a little hay in the barn.Look for current trends to continue with oil running low, and a possible election-year spike if the right guy wins. . . hint, hint. . .

Prices within each area can vary substantially due to various factors, and we always welcome new factual data and your opinions.This study is not intended to replace the financial advice of a professional, whom we are always glad to hear from.Please consider LANDTX for your professional real estate and mapping services, and you are welcome to come visit us at our new, state-of-the-art offices on US 87S in Mason, which we will occupy around August 23, 2016.We wish you and your family a safe and bountiful 2016 and beyond, and thanks for your kind consideration.David E. Culver, Broker