2007 Big Year for Small Land Transactions
Dr. Charles Gilliland explains why the increases in the land markets in Texas in 2007 was primarily concentrated in small- to medium-size properties.
College Station, TX. (Vocus/PRWEB ) June 17, 2008 -- Everything may be bigger in Texas, but when it came to the land market, 2007 was a banner year for all things small.
While the state's land markets increased overall, the rise was primarily concentrated in small- to medium-sized properties.
"The 2007 market saw a pronounced shift away from larger properties," said Dr. Charles Gilliland, a research economist with the Real Estate Center at Texas A&M University. "The size of tract per transaction dropped precipitously to 80 acres compared with 98 acres in 2006."
Gilliland said markets have hovered in the 100-acre range for the past five years, and 140-acre tracts were the norm about ten years ago.
"The 80-acre tract size per transaction sets a new low for Texas land markets," he said.
But while tract sizes shrank, prices did not.
Sales prices increased 20 percent, nearly matching the stratospheric 23 percent posted in 2006. At $2,190 per acre, the 2007 statewide price topped $2,000 per acre for the first time. The 2006 price was $1,825 per acre.
Once again, small properties bested larger properties, registering a $4,000-per-acre median last year compared with $1,800 per acre for the large properties.
Prices for small properties rose 15 percent in 2007 while typical property prices increased 13 percent. By contrast, large property prices barely moved in 2007, rising only 4 percent over 2006 levels.
Gilliland said the recent surge in commodity prices has many investors anticipating strong earnings from farming well into the future, so they see cropland as a viable investment option.
"It's a safe haven for their investment dollars," he said. "These investors are competing with farmers flush with cash from good crops, and the result is higher prices for cropland."
In addition, the falling U.S. dollar has made land prices even more attractive to foreign investors.
With investment markets still in turmoil and uncertainty about future economic events, Gilliland predicts land prices will continue to climb.
"When the investing environment settles into a more predictable pattern, the rate of increase seen in recent years will slow," he said. "As Texas land prices, which are low compared with those in many states, begin to rise, the lure of Texas markets will wane. But do not look for this to happen in the near term."
Gilliland's in-depth analysis of Texas' land market will be included in next month's issue of Tierra Grande, the Center's quarterly journal.
Note to Editors
To interview Dr. Charles Gilliland, call 979-845-2080
Additional research information:
Dr. Mark Dotzour, 979-862-6292
Other contacts: Bryan Pope, 979-845-2088, BPope(at)mays.tamu.edu. For information on the Real Estate Center, contact Senior Editor David. S. Jones at 979-845-2039 (voice), 979-845-0460 (fax) or djones(at)recenter.tamu.edu. More than 29,000 pages of data are available at the Center's web site (http://recenter.tamu.edu).
###
Post Comment:
Trackback URL: http://www.prweb.com/pingpr.php/SW5zZS1TcXVhLUZhbHUtSG9yci1Qcm9mLVplcm8=
Bookmark -
Del.icio.us |
Furl It |
Technorati |
Ask |
MyWeb |
Propeller |
Live Bookmarks |
Newsvine |
TailRank |
Reddit |
Slashdot |
Digg |
Stumbleupon |
Google Bookmarks |
Sphere |
Blink It |
Spurl
|
