Why Land Is Still a Strong Investment

Posted by Chip Bubela on Thursday, June 2nd, 2022 at 3:24pm.

A quick land market update for Brazos Bottom and Austin Hill Country.

Today we want to give you an update on the land markets in the Brazos Bottom and Austin Hill Country regions.

Brazos Bottom:

  • The average appreciation last year was 22%.
  • The average sales price was $8,392 per acre.
  • The total dollar volume increased by 83% to $453 million.
  • The number of sales increased by 21% to 1,160 transactions.
  • The total amount of land sold was 53,911 acres.

The Austin Hill Country posted the best gains in Texas:

  • The regional prices appreciated by 38% in 2021.
  • The average sales price was $5,733 per acre.
  • The total dollar volume grew 102% to $956 million.
  • The total acres sold jumped 47% to 166,740 acres.

As for the Austin/Waco Hill Country, 38% appreciation is quite a bit, but I think there might be a lot of speculative buying with the Samsung deal and everything else going on in the economy. Even the 21% in the Brazos Bottom region is still remarkable.

"Appreciation should slow, but we don’t expect prices to fall. "

When inflation is at 7% to 8%, land looks like the place to put your money, hedge against inflation, and still make a profit. If you put it in a CD where you get 2% to 3%, you’re not really making money; you’re losing it.

We expect to have a great year going forward in 2022. Rates were at 3% last year, they’re at 5% right now, and we expect them to go to 6% later. That will knock some buyers out and slow down our market a bit. Appreciation should slow, but we don’t expect prices to fall with the number of jobs being created. If we can’t make it in the great state of Texas and the region we’re in, you definitely don’t want to move.

If we can help you, let us know by giving us a call or sending us an email. We have some very affordable 10- to 20-acre tracts available running from $150,000 to $300,000. We’d be proud to help you out. Reach us at (979) 221-6679.

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