Territory Review 2010
Southwest Texas did not report a high volume of significant activity, and the overall value trend seems to be headed downward at this time.Uvalde County saw two significant transactions, including the sale of a nice, high fenced 7,075 acres under Conservation Easement for $900/acre, as well as a private treaty sale of 2,251 acres, also with CE, on US 83 north of Uvalde for $1,177/acre.Another CE sale occurred in the BlancoCreekValley, a hotbed of conservation activity recently, with a nice 413 acres with spring-fed lake selling to neighbor for $2,500/acre.Another area sale, NW of Sabinal, was 1,950 acres for $1,510/acre (no CE).ValVerdeCounty saw some sales of 500 – 1,000 acre tracts in the $900/acre range, out of a parent tract that sold for $450/acre earlier in the year.Several larger tracts on the Pecos and DevilsRiver were shopped for around $1,200/acre with no takers.EdwardsCounty saw this office involved in sale of 1,835 acres on Pulliam Creek near Barksdale for $2,186/acre.Another area LANDTX sale was 4,048 acres near the Val Verde/Edwards line for $575/acre.A significant sale occurred in SuttonCounty, of the Fort Terrett Ranch, on the headwaters of the N. Llano River, being 4,287 acres for $2,489/acre.This ranch has a show-stopper lake and nice, rustic improvements, plus historic significance, though this office regards the sale as an aberration (high).Little activity was reported in KinneyCounty, with several larger, S. TX-type ranches on major creeks being shopped at around $2,000/acre with no takers.In ValVerdeCounty, the venerable, 9,100-acre Sycamore Creek Ranch just outside Del Rio found no takers at around $1,475/acre.In this area, the number of transactions was down from the previous year, which was down from previous as well.Proud sellers held steady on their prices, hoping for the downward trend to reverse.It did not, nor will it for the foreseeable future.This office sees this area as remaining a solid value for the recreation/hunting-minded retail buyer, with limited opportunities for speculation due to oversupply of inventory.If you’re looking for the lowest priced land with hills and oaks, this zone remains a viable candidate.We expect to see more significant offerings in the near future, and price competition will only increase when we do.
The Western Hill Country remained fairly slow, with the Divide Country of western Kerr and Real Counties checking in with a couple of 500 – 1000 acre sales in the range of $2,000/acre.Those asking over $2,500/acre in this area are not getting any activity, and we are beginning to see increased signs of price competition amongst needy sellers.As in SW Texas, many sellers refuse to blink, longing for the irrational climate of 2002 – 2007 to return.It is unlikely that their wish will be granted in the foreseeable future.NorthernMedinaCounty saw a sale of 950 acres for $1,840acre.This is a secluded, unimproved ranch.This office participated in sale of 500 acres on the Colorado River north of Brady for $2,900/acre.An October sale of 574 acres near Harper was reported at $2,900/acre.Mason/Llano/San Saba checked in with several sales ranging from 300 to 1,350 acres in the range of $3,400 - $4,700/acre.490 acres near the Gillespie/Mason line finally sold for $2,150/acre, after being exposed for over two years.A sale of 246 acres on the SouthLlanoRiver outside of Junction was reported at $6,077/acre, after receiving 3 years of exposure.Others on the LlanoRiver were shopped at around $5,000/acre with no takers.MasonCounty continued its solid performance, with no evidence of value loss in this highly desirable location, bucking the trend as it did last year.This area continues to be dogged by the specter of electric transmission lines crossing it in various locations.Some buyers are reluctant to even consider the area due to this, and others will simply not consider a property that MAY be affected by a transmission line route.Grassroots opposition has become well-organized and funded, and it is hoped that this will contribute to the proposed CREZ projects being located on the most sensible, low-impact routes, using the single monopoles as opposed to the giant lattice towers.All in all, however (with exception of Mason), this zone has leveled off, showing a tiny bit of value loss in 2009, with the outlook being similar to last year’s.Stubborn sellers will continue to wonder why they aren’t getting any lookers, while those who get aggressive with their pricing are the ones making the deals, for the most part, though there are still a few true retail buyers who are prepared to throw down on just the right place, regardless of price.
The Central and Eastern Hill Country, more or less the center of LANDTX’s territory, saw yet another reduction in activity, volume-wise, as well as some price weakening.This office participated in the sale of 797 acres in far northern KendallCounty, with 4 acre lake and $1M home, for $6,978/acre, with the “dirt only” value being around $5,400/acre.Kendall County also saw two small sales on the Guadalupe River – one being 117 acres purchased as a county park for $16,750/acre, and the other being 189 acres for $13,298/acre having easement access.Gillespie County saw very few significant transactions in 2009, perhaps the most meaningful being the purchase of 511 acres on Grape Creek near Luckenbach, with a dirt-only value of $7,900/acre.A somewhat bland 288 acres on major-league Crabapple Creek fetched $8,484, while a 657 acre parcel on Grape Creek east of Fredericksburg checked in at about $5,300/acre.This office shopped 3,100 and 1,126 acres on the PedernalesRiver for $8,000 - $9,000/acre with no takers and few lookers.Look for price adjustments and/or different marketing approach on both of these in 2010.We also saw the sale of 788 acres out of Brushy Top Ranch for $8,339/acre, having two lakes and nice cabin, plus was high fenced on major highway.Fredericksburg itself continues to thrive as the “hub” of this area, and the crowds seen in town on weekends are simply amazing!BlancoCounty saw several interesting sales, including this office’s sale of 940 acres near Cypress Mill for $4,850/acre, with conservation commitment by buyer.This ranch previously sold for $6,328/acre in 2007. . . HELLO!The sale of 443 acres in SW Blanco County was reported at $4,093/acre, out of a parent tract of 950 acres which sold for $4,511/acre in 2007.HMMM!Looks like some of the non live water product may be losing value here.This is consistent in all areas, as the more featureless offerings seem to sit regardless of price unless reduced to 50% of 2007 levels, and the primo land is holding its own or slightly increasing in value.The poorly-accessed, but beautiful Campbell Ranch, being 1,200 acres on prized Crabapple Creek, has been on the market since 2005, with a starting price of $8,950/acre at that time.The current asking price is $5,800/acre, and it still sits.This zone probably experienced the most dramatic price appreciation in the early 2000’s, and this will likely come back to haunt it in the near future, should things continue as is with the economy.We did see an impressive sale of 95 acres on the BlancoRiver near Wimberley for $31,000/acre, while just downstream, 590 acres on the Blanco was offered for $17,500/acre with no takers.This office participated in sale of 150 acres with Conservation Easement on Onion Creek SE of Dripping Springs for $10,667/acre, and marketed a very nice 193 acres on South Onion Creek nearby for $18,000/acre with no takers.Conservation tracts of 100 acres near Driftwood were offered at $10,000/acre with mild interest.There is little doubt that the severe drought of 2008-2009 had a negative effect on the marketplace, as creeks and pastures dried up, and the countryside looked its worst.The rains of late 2009 and early 2010 will certainly spruce things up, and this office looks forward to its area listings having their Sunday Shoes on for the spring/summer selling season!
The Inland Plains did not report much significant activity in 2009, as asking prices and willing buyer prices did not merge very often.A pretty nice 912 acres west of Gonzales fetched $3,289/acre, a price that would seem to be an aberration.Asking prices in GonzalesCounty remain in the $3,000/acre range, but activity has slowed dramatically, and will likely remain slow until prices adjust.WilsonCounty did not report any sales of magnitude, and this office shopped the very nice, 192 acre Alum Creek farmstead for $4,650/acre with no takers.A 204 acre tract in same area was shopped at $3,950/acre with same results.We did see sale of 200 acres just NE of Stockdale for about $2,350/acre, an average property with good road frontage and some minerals.A couple of larger area tracts were offered at $2,500 - $3,500/acre with no takers.KarnesCounty was inactive, with San AntonioRiver properties offered for as low as $1,900/acre, no bites.Parts of this area are now sizzling with the excitement of the Eagleford Shale, with rumors of O/G leases paying bonuses of over $1,000/acre!This is reputed to be the hottest petro play in the state since the Barnett Shale bonanza near Fort Worth.This area, being more agricultural in nature and less speculative/development, should hold value better than some of the wildly fluctuating areas such as Kerrville, for example, though we do anticipate land values to slowly decline for the foreseeable future here.Again, rigid sellers hold their ground, picky buyers look and wait.The Seguin area is seeing much development, with land prices in the immediate vicinity of the community still increasing due to development pressure, though the outlying areas of the county are stagnant at this time.Bee and Live Oak Counties don’t report much in the way of larger sales, but buyers are still pulling the trigger on nice, smaller places of less than $1M, we are advised, if the price is right.The continued interest in the Carrizo Aquifer by San Antonio and Austin are dark clouds hovering over this area, though a few lucky landowners are likely to reap most of the rewards, to the detriment of all the others.Go figure!Hopefully justice will prevail, and water rights will become more properly and fairly defined.
The Upper South Texas Region reported several interesting sales in 2009.This office participated in sale of 5,058 acres near Pearsall, part of which has been resold for about $2,100/acre, we are told.Medina County reported sale of 825 acres with 8 acre lake on good creek in transition country NW of D’Hanis, dirt only value of $2,575/acre.A partially irrigated, highly improved farm/ranch NW of D’Hanis checked in at $3,500/acre for the dirt only (estimated).The sprawling Rafter R Ranch remains on the market, with prices edging lower every six months or so.There is no data available on any other meaningful sales in this area, which, like most others floundered, activity-wise much of the year.There were many offerings of first-class, smaller farms/ranches with nice homes in the $1.5M-$2M range, some of which were successful, though not meaningful to our discussion due to small size/high value of improvements.There will always be a market for fairly-priced, state of the art small farmsteads within an hour or two of Austin and/or San Antonio, no doubt.This area, like others, suffers from being way overpriced in 2008, and the perception of the reality since then simply hasn’t properly registered with the majority of the area landowners attempting to sell ranchland.
We believe that counties within 75 miles of the border with Mexico suffer stigma, which is reflected in significant declining land values (particularly when on or close to the Rio Grande).This stigma seems to fade away as one goes upriver from Del Rio to Big Bend.Part of the stigma is a result of a high level of illegal alien traffic, another part is due to the highly-publicized violence in Mexico and near the border.The word on the street is that the illegals moving thru the border area of Texas/Mexico are often armed and dangerous, and it’s not a good idea to run into a gang of 10 while on your four wheeler in a remote corner of the ranch.This is a sharp departure from past days when ranchers would leave canned food and fresh water out for them, and not worry about the safety of their family or the security of their possessions.
In summary, 2009 proved to be as previously predicted, with activity levels down in all areas, and a general retreat in values based on property quality.The top 25% of quality property saw slight gain of 5%, the middle 50% saw slight retreat of 5%, and the bottom 25% saw loss of about 12%.This is pretty much across the board for each sub-region, though we did see some eye-opening sales with very special live water in the Hill Country for off-the-chart-type pricing occur during the year.This indicates that sophisticated, elite buyers are still willing to write checks for just the perfect place, the type of which are rapidly being either developed or absorbed by neighbors, and often don’t hit the public radar screen.
We believe the future holds more of the same, at perhaps a slightly higher rate across the board.Truly special properties will continue to receive attention and sell, but we believe that these properties must have squeaky clean title, security-level privacy and the most unique of private water features.This office is often aware of these properties being offered at private treaty (not publicly listed), and is available to represent you in their purchase if you choose to engage us.
We do not deviate from our belief that land is a proven, long term investment, with intangible value that can far outweigh dollars and pennies.That said, it is prudent to be aware of trends in land markets, which are not always the same across the board in different parts of the State.Central Texas remains very solid for the long term, with growth predictions that stagger the mind, as long as the water problem is adequately addressed ongoing.This growth will also result in the continued exploitation of nearby resources such as limestone rock (for homes and roads), sand/gravel and topsoil, which, in turn, will result in unhappy neighbors and property rights disputes.Regardless, the growth is nothing but good news for long term rural land values.This also bodes well for quality agricultural parcels in the surrounding regions, particularly irrigated farms with solid water rights, and somewhat less for quality grazing units.
As always, there are many exceptions to this report, and some sales have occurred which we have not reported in this article due to space limitations, plain ignorance or confidentiality.Prices within each area can vary substantially due to various factors, and we always welcome new factual data and your opinions.We appreciate our many fine friends and peers who supply us with good information, and are committed to this ongoing project for years to come.You are welcome at our office in Boerne at any time to share a cup of coffee, talk about land conservation and property rights, and check out our unique operation.Also, we hope that you will consider our professional services if the need arises, and we wish you and your family a safe and bountiful 2010 and beyond.Thanks for your consideration. DEC