The average price-per-acre of “small land purchases” in the Texas Panhandle and South Plains shot up 34.8 percent from 2015 to 2016, according to a recently released Texas Association of Realtors study.
Small land purchases in Region 1, which spans from the top of the Texas Panhandle to Midland and Odessa, are defined as 159 acres or less. They typically include rural farmland or ranch properties but do not reflect oil and gas mineral rights acquisitions.
Buyers spent an average of $2,374 per acre on 163 such purchases in Region 1 last year, up from $1,761 in 2015. The 34.8 percent increase was 2.5 times that of Northeast Texas, which had the state’s next-largest increase.
Urban sprawl around the Amarillo and Lubbock metropolitan areas has increased land values, said Cindi Bulla, the Texas Association of Realtors’ regional vice president and secretary/treasurer-elect.
Developers have bought up land formerly used for growing crops, Bulla said, as commodity prices have lagged and irrigation costs have risen. The sales are often for a few dozen acres, large enough to trim farmers and ranchers’ portfolio without decimating it entirely.
“Because growth has been so rapid in Lubbock and Amarillo, we’re seeing a lot of 100-acre-or-less tracts purchased for development,” said Bulla, who owns Realty Central of Amarillo.
Low-acreage sales are typically more competitive than great swaths of land, said Jerry Schniederjan, a sales agent with Clift Land Brokers. More buyers can afford small land parcels, thus driving up the price per acre.
Savvy sellers are dividing their property as such, Schniederjan said, to maximize their return. The total acreage of all small land purchases dropped 10.6 percent from 2015 to 2016, but sales rose $27.8 million.
“Traditionally, there have not been a lot of small-acreage (properties) available up here, but that has really changed in the last year. We’ve seen several different people that are flipping…