UNIVERSITY " rural Experiment Station ricultural Extension Service tion; Texas A B4063 April 1967 in t/ae T exas Farm and Ranch LAND MARKET Contents Summary ........................................................................... -. 2 Introduction .................................................................... .- 3 Limitations of This Study ........................................... .. 3 Texas Land Market ....................................................... .- 4 Per Acre Price ........................................................ .- 4 Size ............................................................................ .. 5 Mineral Activity ..................................................... .- 5 Sales Involving Credit ........................................... .. 5 Interest Rates ......................................................... .. 5 Veterans Land Board ........................................... -_ 5 Land Use ................................................................. .. 5 Divergence of Net Income and Land Prices .......... .. 6 Land Market Activity in Type-of-farming Areas .... .- 6 Northern High Plains ........................................... .. 6 Southern High Plains ........................................... .- 7 Rolling Plains and Prairies .................................. .. 8 Upper Rio Grande Valley .................................... .. 8 Edwards Plateau and Central Basin ................... -. 8 South Texas Plain ................................................. ._ 8 Lower Rio Grande Valley .... ............................. .- 8 Coastal Bend ........................................................... ._ 9 West Cross Timbers ............................................... .. 9 Grand Prairie ......................................................... ._ 9 Blackland ................................................................. __ 9 East Texas Farming .............................................. ._ 9 East Texas Timber ............................................... __ 9 Post Oak ......................................... ....................... ._l0 Coast Prairie ........................................................... ._l0 Summary This report of the 1965 Texas land market activity is based on information obtained from 26 sample counties in 16 ofthe 17 type-of-farming areas. In each sample county, specific data were obtained from warranty deed records of all borija fide sales containing 20 or more acres located outside corporate limits of towns. General information was obtained from per- sons having knowledge of local land market activity. Before World War II agricultural land pricesfand net farm and ranch income were positively correlated. An increase in net income was soon followed by an increase in land prices, and a decrease in net income resulted in a decrease in land prices. Post World War II land market activity has shown that agricultural land prices consistently increased while farm and ranch net income fluctuated and actually declined. In 1965, agricultural land prices for the state were 189 percent higher than in 1947 while net farm and ranch income was 15 percent lower. This relationship indicates a strong demand by buyers for agricultural land, to be used for non- agricultural purposes. Many of today's buyers use agricultural land for part-time farms, rural homesites, tax avoidance, investment, speculation, status and outdoor recreation. Although agricultural land prices in general seem to be closely related to factors external to agriculture, land prices in four type-of-farming areas are closely related to agricultural productivity and net income. These areas are the Northern High Plains, Southern High Plains, Upper Rio Grande Valley and Lowe Rio Grande Valley. Results of the 1965 land market activity follow: (1) average land price was $156 per acre, 16 percen‘ above the 1963 average, (2) volume of sales was 3 percent below the 1963 average, 60 percent of al land sales were mortgaged, (4) the seller was the principal lender, (5) mortgage interest rates range from 41/2 to 10 percent, (6) Veterans Land Board wa used in approximately 2 percent of all land tran actions and has ceased to be a factor that strengthen demand in the Texas land market, (7) all or som of the mineral rights were retained by the seller i; 58 percent of all land transactions, (8) out-of-count. buyers were involved in 35 percent of all land tran actions and (9) 18 percent of all buyers were resident of Dallas, Harris, Tarrant and Taylor counties. This study is designed t0 provide general in formation relating to trends of the above factors. Th results have certain limitations and depict only tren of land market activity over time in each type 0 farming area. The data do not reflect the averag’ land price of any particular farm or ranch and shoul not be used, except as a general guide, where seekin values for specific properties. Jvos lthe Texas Farm and Ranch LA ND MA R KE T Vi: ' . B. ANDREWS AND ALVIN B. WooTEN* ‘vely, resource development specialist, commercial recre- ” exas Agricultural Extension Service and professor, nt of Agricultural Economics and Sociology. DURING THE PAST 20 YEARS, the nature of the Texas agricultural land market has experienced drastic changes. In many areas, land use has shifted from traditional agricultural use to multiple use or to uses external to agriculture. Before World War II, buyers viewed agricultural land almost entirely as a necessary ingredient in the production of an agricultural com- modity. Land values were determined by the con- tribution land made to total production and net income. Following World War II, the land market re- flected an interest by buyers in agricultural land as a consumption good as well as a production good. Buyers began paying prices in excess of the agricul- tural productivity value and using the land for part- time farms, rural homesites, tax avoidance, invest- ment, speculation, status and recreation. This addi- tional demand for agricultural land has resulted in a consistent yearly increase in land prices. In 1965, the weighted state average land price was $156 per acre, 189 percent higher than in 1947, while the net farm and ranch income was approximately l5 percent lower than it was 18 years earlier. This report is the result of a continuing endeavor to keep abreast of Texas farm and ranch land market activity and to maintain current indices of land prices, volume of land sales, credit sales and mineral activity. Twenty-six sample counties located in 16 of the 17 Texas type-of-farming areas were selected for this study. The 17 areas are delineated in Figure l. In each of the sample counties, information was obtained from warranty deed records of all bona fide transfers of 20 or more acres of agricultural land during 1965. Some 1,000 land transfers were analyzed. Additional information was obtained from real estate brokers, county agricultural agents, county clerks and other persons having knowledge of land market activity in each of the 26 sample counties. Specific information was solicited as to reasons for purchase and sale of land, proposed use of land, the extent of speculation and the influence of mineral activity, recreation and urbanization. This informa- tion aided in analyzing and interpreting the data obtained from warranty deed records. LIMITATIONS OF THIS STUDY A study conducted utilizing sample data gathered from public sources has certain limitations. The study does not propose t0 reflect the average price of any particular farm or ranch and it would be improper to rely upon the price data as reflecting the market value of even a part of a county. Many more small properties are sold than large properties in most areas during a given year. Because small properties usually bring more per acre than large properties the price is influenced upward. The data are not useful for determining value based upon an agricultural pro- ductivity concept but rather reflect market value for broad general areas. 1456156’? Y/fi Sample counties Figure 1. The 26 sample counties, by type-of-farming areas, in the 1965 study of farm and land prices. The 17 areas follow: 1. Northern High Plains 9. Lower Rio Grande Valley 2. Canadian Breaks l0. Coastal Bend 3. Southern High Plains 11. West Cross Timbers 4. Rolling Plains and 12. Grand Prairie Prairies 13. Blackland 5. Mountains and Basins 14. East Texas Farming 6. Upper Rio Grande Valley 15. East Texas Timber 7. Edwards Plateau and 16. Post Oak Central Basin 17. Coast Prairie 8. South Texas Plain TABLE 1. 1954, 1960, 1963, 1965 AVERAGE SALES PRICE OF FARM AND RANCH LAND, BY TYPE-OF-FARMING AREAS IN TEXAS, 1947-49, TEXAS LAND MARKET - Factors considered relevant to a general analysis of Texas land market activity are per acre price, volume of land sales, size, mineral activity, avail- ability of credit, interest rates, Veterans Land Board activity and land use. The importance of each factor varies among geographic regions of the state; there- fore, no attempt was made to; isolate and quantify each factor or to rate the factors as to a cause and effect relationship. The purpose was to depict the actual land market situation that existed in 1965 and to compare it to previous years for trends and future predictions. " ,1 ,3. Per Acre Price Table 1 lists the average per acre sales price in each type-of-farming area and the weighted state per acre sales price between 1947-49 and 1965. Land prices increased or remained constant in l4 of the 16 type- of-farming areas between 1963 and 1965. The South- ern High Plains, located in the southwestern quarter of the Panhandle, was the only area that reflected a slight decline in land prices. Land sales in the Mountains and Basins, located south and west of the Pecos River, were not available in sufficient quantity to derive an average land price for 1965. From 1947-49 to 1965, the relationship between average per acre land price and volume of land sales was that of an inverse correlation, land prices have consistently increased while the volume of salesl has ‘Volume of sales is the number of land transfers and does not represent total acreage. 1947 -49 1954- 1960- 1963- Type-of-farming areas‘ 1947-49 1954 1960 1963 1965 to 1965 1965 1965 1965 i A Dollars per acre Percent change 1. Northern High Plains 46 74 124 169 197 328 166 59 17 3 Southern High Plains 75 131 206 265 252 236 92 22 - 5 4. Rolling Plains and Prairies 52 74 100 98 128 146 73 28 31 5. Mountains and Basins 9 13 19 41 2 2 2 2 '-’ 6. Upper Rio Grande Valley 737 823 1073 700 738 0 _10 -31 5 7 Q Edwards Plateau and Central Basin 30 71 65 99 112 273 58 72 13 8. South Texas Plain 46 85 78 107 116 152 36 48 8 9. Lower Rio Grande Valley 228 330 372 301 365 60 11 _ 2 21 l0. Coastal Bend 104 170 240 349 349 236 105 45 0 11. West Cross Timbers 32 63 79 110 124 288 97 57 13 12. Grand Prairie 33 66 82 106 130 294 97 58 23 13. Blackland 69 112 149 202 271 293 142 82 34 14. East Texas farming 33 53 81 118 142 330 168 43 20 15. East Texas timber 34 68 73 116 203 497 199 178 75 16. Post Oak 27 40 69 114 120 344 200 74 5 17. Coast Prairie 54 145 199 232 231 328 59 16 0 Weighted state average 543 833 106*‘ 1353 156i’ 189 88 47 16 ‘For detailed description of type-of-farming areas, see Texas Agricultural Experiment Station Bulletin 964, pps. 25-49. “Insufficient number of bona fide transfers to derive an average land price for 1965. “The procedure for computing the weighted state average was changed in 1965. area by size of the area in relation to the entire state, then multiplied by the weighted per acre price and totaled to derive the weighted state average for all years. 4 A factor was determined for each type-of-farming ,The only deviation from this pattern was ‘en land prices and volume of sales were rrelated. However, the relationship re- the traditional pattern in 1965. The te average land price was $156 per acre g9 percent higher than in 1947-49, while isales were 60 percent lower, approximately in 1935. V, was a decrease in volume of sales between 11965 in all type-of-farming areas from which i-"collected for this study. The total acreage in the state decreased approximately 40 _= this two-year period. ~result of large tracts of land being divided smaller units, the median size land sale i areas of the state has decreased since 1954. i‘ l use of the smaller tracts of land is _ that of enlargement of existing farms and if 2' The smaller tracts are also being used for farms, rural homesites, status, investment, _ and recreation. In this type of land “all tracts with a variety of possible uses eive a higher per acre price than large 1. i ctivity ill rights influence land prices and land I tivity in some areas of the state as evidenced It that sellers retained some or all of the ights in 58 percent of the 1965 land trans- g This is approximately the same percentage i and 1963, suggesting that mineral rights been responsible for a significant change in A ‘s or land market activity for the state as a However, in five of the 16 type-of-farming iineral activity has been prominent for a jof years. Mineral rights are commonly and transferred separate from the land. In flized land markets, land transferred with rights commands a higher per acre price Jjflv transferred without mineral rights. localized land markets of limited mineral ifimineral rights seem to be automatically trans- ththe land and have little influence on land i, land market activity. lvolving Credit W availability of credit is closely associated with me of sales. Easy credit encourages sales tightening of credit usually results in a de- i sales volume. For example, in 1960, 50 per- l-the total lanfditransactions were mortgaged. 5 73 percent of the total land transactions were ,1 and volume of sales increased approxi- 4" percent over the 1960 level. Then in 1965, o sales accounted for only 60 percent of total “d volume of sales decreased approximately ,3 Ill. The seller was the principal lender in 1965, con- sistent with the trend since 1947-49. The seller, by handling the loan and mortgage, is in a position to obtain higher interest rates than commercial lending institutions, and provide himself with a guaranteed income for a specified period of time, thus creating a possible tax advantage. Buyers, in many cases can enter the market with a smaller down payment and less collateral than required by commercial lending institutions. Sellers competing with commercial lend- ing institutions for mortgage loans act to increase the number of potential buyers and consequently increase the volume of sales. Interest Rates A change in mortgage interest rates could alter the demand for loans and be reflected in land market activity. Decreasing or low interest rates tend to encourage mortgage loans and increase land market activity. Increasing or high interest rates tend to dis- courage mortgage loans and restrict land market activity. Mortgage interest rates in Texas have remained relatively stable between 1960 and 1965. It appears that interest rates have had little influence on land market activity between 1963 and 1965. Veterans Land Board Since its beginning, the Veterans Land Board has been responsible for 34,500 land transfers involving 2 million acres of land. Veterans Land Board activity is restricted to the extent that a maximum of $7,500 can be loaned only to Texas veterans. In the ranch- ing area of Texas, characterized by large land hold- ings, the Veterans Land Board is inactive. In other areas of diversified land use, characterized by small land holdings, the Veterans Land Board strengthens the demand for land. Veterans Land Board activity increased between 1960 and 1963, accounting for a portion of the increase in volume of sales during this period. The reverse was true between 1963 and 1965: Veterans Land Board activity decreased, accounting for a portion of the decrease in the volume of sales during this period. The primary reason for the decrease of Veterans Land Board activity during 1965 was the lack of funds. As of December 1, 1965, the new application loan program was terminated. Loans were approved for existing applications only on the basis of repayment to the revolving fund. For all practical purposes, the Veterans Land Board has ceased to be a factor in the Texas land market. ' Land Use A change in land use from traditional agriculture to multiple use or to a higher and better use is usually accompanied by an increase in land value. For example, nearly 28 million acres of land used for agricultural production are also leased for wild game hunting. Multiple use of these acres produces income 5 from both sources, and these lands should command a higher price than comparable land deriving income from only one source. Land use patterns and land ownership patterns are changing as a result of the large number of sales to out-of-county and urban residents. In 1965, 35 percent of all sales in the 26 sample counties were to out-of-county ‘buyers. Eighteen percent of all sales were to buyers in Dallas, Harris, Tarrant and Taylor counties. Land ownership patterns seem to be chang- ing from local ownership. to absentee ownership. Many land markets have felt the impact of the urban demand for land. This impact on land market activity has been reflected through increases in land prices. In some counties located near large metro- politan areas, up to 65 percent of the 1965 land trans- fers involved out-of-county buyers. DIVERGENCE OF NET INCOME AND LAND PRICES Traditionally, land prices and net farm and ranch income have moved in the same direction with a time lag of 1 or 2 years. An increase in net farm or ranch income would result in increased land prices. Conversely, a decrease in net income would result in a reduction in land prices. Following 1947-49, this trend was reversed. Land prices consistently increased while net income fluctuated and actually declined. Compared to 1947-49, land prices in 1965 were 189 percent higher while net income was approximately 15' percent lower. This expanding gap between land prices and net income indicates that agricultural land Land prices Index Net farm income I I I I I I I I I I I I I I I P I I949 50 51 52 53 55 55 56 57 58 59 60 61 62 63 6+ 65 Year Figure 2. Index of Texas farm and ranch land prices and net farm income, 1949-65. Base for land prices, 1947-49 = 100. Base for net farm income, 1949 = 100. 6 TABLE 2. RATIO OF FARM AND RANCH LAND PRI TO NET FARM INCOME, EXPRESSED IN NUMBER O ‘A YEARS OF NET INCOME REQUIRED TO PAY FOR LAN 1947-49, 1960, 1963 AND 1965‘ Items 1947-49 1960 1963 1965, ——————Years——————i Cotton farms, Blackland Prairie 4.4 1 14.4 9.0 10.7 Cotton farms, =' (irrigated), High Plains 3.6 6.6 6.9 7.8 Cotton farms (nonirrigated), High Plains 3.7 6.3 7.1 8.4 Wheat-grain sorghum farms, ' Southern Plains 4.7 6.0 14.7 9.4 Winter wheat farms, i Southern Plains 4.4 7.0 9.7 10.0 Cattle ranches, Southwest 12.0 17 .0 26.0 25.0 ‘Much of the data used for these calculations obtained fr “Farms Costs and Returns . . . Commercial Farms by Type, S’ and Location,” Bulletin 230, ERS, USDA, Washington, D. l Revised June 1966. prices in general are not determined by agricultu productivity but are increasingly influenced by fact external to agriculture, Figure 2. The ratio of per acre agricultural land pri g to average per acre farm and ranch income van widely among the various type-of-farming areas. S geographic areas were selected to express the ratio 3 - land prices to net income for specific years since 194 49. This ratio shows the length of time required pay for land if all net income were used for t purpose. For example, the net income of wheat-gr sorghum farmers in the Southern Plains increa + between 1963 and 1965. Using 1963 net income, would require 14.7 years to pay for an average whe grain sorghum farm. Using 1965 net income, the ti requirement would be reduced to 9.4 years, Table LAND MARKET ACTIVITY IN TYPE-OF-FARMING AREAS Factors which describe the actual land mar situation in each type-of-farming area are per a price, credit sales, principal mortgage lenders, volu of sales and mineral rights, Tables 3 and 4. attempt was made to quantify the influence of th factors on land market activity or on per acre pri The following analysis of land market acti by type-of-farming area includes a general descripti of each area, identification of primary agricultu enterprises and factors deemed responsible for chan in land market activity. Northern High Plains This area is composed of all or parts of the most northern counties on the High Plains. The s are primarily dark brown and reddish brown clay -_ clay loams. Agricultural characteristics include subhumid climate, low and erratic rainfall, a sh growing season and the shortest frost-free period any part of the state. Primary agricultural en D SALES DATA BY TYPE-OF-FARMING AREA IN TEXAS, 1960, 1963 AND 1965 2 u ‘ Per acre price Proportion of sales mortgaged farming area 1960 196s 1965 1960 196s 1965 ---—-—Do1lars — — — — — — — — ——-Percent—————— High Plains 124 169 197 45 40 47 iiHigh Plains 206 265 252 52 75 64 Sins and Prairies 100 93 123 53 75 50 and Basins 19 41 1 45 39 1 Grande Valley 107s 70o 7ss 50 60 75 i_ ‘Plateau and Basin 65 99 112 67 7s 65 i; sPlain 7s 107 116 4o 7s s2 1'6 Grande Valley, s72 s01 365 68 80 70 d 240 s49 s49 so 75 50 t”. l. Timbers 79 110 124 _52 70 78 --e s2 106 1s0 74 70 70 s 149 202 271 52 79 64 Farming 81 118 142 39 70 55 .. lTimber 7s 116 20s 10 56 45 ._ - 69 114 120 5s 81 70 119 2s2 2s1 64 7s 67 .ta. egiestock, cotton, grain sorghum, small grain, ' d wheat. of sales decreased approximately 25 per- [land prices increased 17 percent between 965. Fifty-five percent of the land trans- made to out-of-county buyers. Forty- ] nt of all sales were mortgaged, and 67 1: ese mortgages were handled by the seller. increase in land values is attributed to evelopment north of the Canadian River. igh Plains n counties located in the southwestern e Panhandle make up the Southern High Plains type-of-farming area. This area is characterized by clay loam and fine sandy soils, an average annual rainfall that varies from 20 inches in the northeastern" ' part to about 15 inches in the southern and western parts, an average frost-free period ranging from 200 to 220 days and a flat topography sloping gently to the southeast. Influential metropolitan areas are Lubbock, Midland and Odessa. Agricultural enter- prises are primarily cotton, livestock, grain sorghum and cash grain. Volume of sales decreased nearly 50 percent while per acre price declined 5 percent between 1963 and 1965. Agricultural land prices in this area are rather closely related t0 agricultural production, commodity A LAND SALES DATA BY TYPE-OF-FARMING AREA IN TEXAS, 1960, 1963 AND 1965 Volume of 1963 and 1965 Proportion of sellers retaining {arming area Principal sales compared all mineral lenders to 1960 rights 1965 1963 1965 1963 1960 1965 l v — — — — — — — — Percent — — — — — — —— — A s. High Plains Seller 200 191 55 50 38 High plains Seller 45 - 25 27 45 29 ‘Plains and Prairies 561161‘ 40 13 4 19 14 "w. and Basins 1 54 1 13 5 1 1,35,, Gmnde Valley Seller _ 50 _-_ 20 10 10 25 Plateau and Central Basin Seller 30 2 2 2 0 "Texas Plain $81181‘ —- l4 5 1 4 TRio Grande Valley Seller 44 - 7 10 10 5 ‘ Bend Seller and insurance companies 60 1 _ 60 10 3 0 1 Timbers Seller and banks -- 7 — 29 l4 2 1 ‘l ifie 1;.» Seller 23 0 3 1 0 d -;' . seller 65 _ 1o s l 0 Farming seller and banks 0 _ 2s l6 24 so i} s Timber Seller and banks 12 - 32 1 1 20 Z. Seller and banks 44 _ 50 2 1 7 a me Seller 195 _ ls 18 6 l1 data. prices and net income. The diminishing land market activity in 1965 is probably a reflection of the 1964 drouth, depleted irrigation water supplies and in- creased production costs. However, the 1965 net in- come position improved to approximately the 1963 level. Future land market activity will depend a great deal on cotton prices, production costs and availability of irrigation water. Rolling Plains and Prairies This area is composed of all or parts of 50 counties in North Central Texas east of the High Plains. There are wide differences in soils ranging from dark clays and clay loams to loose sands. The topography is cut sharply by many rivers and their tributaries providing some bottomland for cultivation. The climate is subhumid, and the average annual rainfall varies from 28 inches in the east to 22 inches in the west. The primary agricultural enterprisesare livestock, cotton, grain sorghum and wheat. Good quality water is available only in limited portions of the area. Per acre land prices increased 31 percent between 1963 and 1965 from $98 to $128, while volume of sales declined 20 percent. Sixty percent of the sales utilized credit with the seller handling the loan on 5O percent of these. A large portion of the increase in land prices was the result of urban and out-of- county influence. Forty-five percent of all buyers were out-of-county residents. Upper Rio Grande Valley This area is located in the most western portion of the state in El Paso and Hudspeth counties. It is the smallest type-of-farming area in Texas and is comprised of a narrow strip of alluvial soils extend- ing about 75 miles along the Rio Grande river above and below El Paso. The climate is arid with an average annual rainfall of less than l0 inches. The average frost-free period is about 240 days. The principal agricultural enterprises are cotton, alfalfa, vegetables, livestock and dairying. All crops in this area are irrigated. The upper Rio Grande Valley is one of the regions of the state in which land prices are closely tied to agricultural production. Increases in net income or agricultural production are usually fol- lowed by increases in land prices. (Few land units are transferred in any one year. The land sales data show a per acre price increase of 5 percent, from $700 in 1963 to $738 in 1965. The 1965 average of $738 per acre is approximately the same as the 1947-49 average. Edwards Plateau and Central Basin Nearly 27 million acres spread over 30 counties located directly south of the Panhandle and extending south to the Rio Grande make up this area. The soils are shallow, stony clay loams; the topography 8 is rough and broken; the average annual rai ranges from 15 inches in the west to 30 inches in east; and most of the area can be used only for ;’ ing. Cattle, sheep and goats are the primary agri tural products. Less than 3 percent of the lan cultivated. Per acre land price increased 13 percent bet i 1963 and 1965 from $99 to $112, while volume of 1 declined approximately 20 percent. Out-of-co buyers accounted for 27 percent of the sales. , percent of the sales involved tracts of land sm than 150 acres, indicating that a large portion of relatively small tracts of land probably will n§t used for commercial agriculture. Dense populations of deer and wild turkey in the area providing an opportunity of multiple use, ranching and hunting. Nearly 33 percent of entire area, or 9 million acres of ranch land, leased for hunting during the 1964-65 hunting se In addition to hunting, 124,200 acres of private é and water are used for other forms of comme outdoor recreation such as fishing, guest ran resorts, campgrounds and picnic grounds. Stabl come from outdoor recreation enterprises and u demand have been reflected in the land market are responsible for a portion of the increase in 1 prices. South Texas Plain This area is made up of 21 of the southern counties of the state, including a large part of Rio Grande Plain. The soils include dark clays, loams and sands. The topography is gently rol and the land is brush covered. The average an rainfall ranges from 20 to 30 inches. Agricul enterprises range from intensive irrigated vege and truck farms to extensive livestock operation The 1965 per acre land prices increased 8 pe while the volume of sales decreased approxim 3O percent from 1963. Fifty percent of the sales * for tracts less than 200 acres, and 4O percent of‘ land transfers were to out-of-county buyers. million acres, 20 percent of this area, are l, annually for upland game hunting. Increased per acre land prices seem to n reflection of past irrigation development for cash a production, multiple use of land for ranching f hunting and urban demand. ‘ Lower Rio Grande Valley The three southernmost counties, Cam Hidalgo and Willacy, comprise this area. The i range from light sands in the north to dense along the Rio Grande, the climate is semi-tr with an average frost-free period of more than days and the topography is flat in the south and to gently rolling in the northwest. Principal cultural crops are cotton, small grain, livestock, ~ and vegetables. per acre land price was $365, approxi- ‘t e as the 1960 per acre land price. Out- 7 ers and out-of-state buyers accounted for all land transactions. Fifty percent of for tracts of land between 20 and 30 i‘ The large number of out-of-county all-sized land sales have been common r a number of years. These two factors i not significantly influence land values. » er Rio Grande Valley is an area in which e closely related to agricultural produc- i income. Between 1960 and 1963, per ices decreased 19 percent as a result of , e years of severe winter and summer if ween 1963 and 1965, per acre land prices p. percent as a result of increased yields e. " a consists of seven counties along the xico from below Corpus Christi to the if dary of Refugio County. The soils are 0 clay loams, the average annual rainfall .inches, the topography is relatively flat -free period is approximately 300 days. is enterprises are primarily cash crops and market activity in the Coastal Bend area 'mately the same in 1965 as in 1963, so V» e of sales, transfer of mineral rights and d prices were concerned. Timbers {acounties in North Central Texas make up ' he soils range from sand to sandy loams, . graphy is gently rolling to rough stony. f; annual rainfall is about 30 inches, and e period is approximately 225 days. _; cultural enterprises are beef cattle, dairy- i‘ ts, fruits, pecans and poultry. 1963 to 1965, volume of sales decreased tely 20 percent while per acre land prices l3 percent. Fifty percent of the transactions i: cts of land less than 130 acres in size. Out- buyers from Dallas, McLennan and Tarrant were responsible for 32 percent of the land _ s; 11 percent were residents of Tarrant j Urban demand for land for part-time farms, n, investment, rural homesites and recrea- responsible for a large portion of the land ase in 1965. airie Grand Prairie, area is made up of all or {- 2 counties in North Central Texas between i Cross Timbers and Blackland type-of-farm- pl The soils are clays and clay loams, the 3| is gently rolling prairie to stony soils on )1- the average annual rainfall is 30 to 35 d the average growing season is 225 to 240 days. Agricultural enterprises are dairying, beef cattle, sheep and goats, cotton and small grains. Volume of sales in 1965 decreased to the 1960 level, while per acre land“ prices were 58 percent higher than in 1960 and 23 percent higher than in 1963. Out-of-county buyers in 1963 accounted for 55 percent of all land transactions. Sixty-five percent of all sales in 1965 involved buyers from Tarrant, Dallas and McLennan counties. Thirty-two percent of all buyers were residents of Tarrant County. This area is close enough to Dallas, Fort Worth and Waco to feel the impact of urban demand. A lar e ortion of the 23 ercent increase in er acre g P _ P P land rice was the result of the urban demand for P . t. part-time farms, investment and recreation. Blackland The Blackland area is composed of all or parts of 25 counties in Central and North Central Texas. There is a range from blackland to light sandy to shallow stony soils, and the topography ranges from gently rolling to steep stony slopes. The various soil types allow a diversification of agricultural enterprises which include cotton, small grains, grazing crops, live- stock, dairying, poultry and specialty crops. Per acre land prices increased from $149 in 1960 to $202 in 1963 and to $271 in 1965, an increase of 82 percent above the 1960 land prices. Out-of-county buyers have consistently accounted for approximately 50 percent of the annual sales. The same trend con- tinued in 1965 with 40 percent of all sales going to buyers residing in Dallas county. Fifty percent of all sales involved 60 acres or less. The tremendous increase in per acre price was the result of urban demand for land for part-time farms, investment and recreation while a small por- tion was from the demand for farm enlargement. East Texas Farming The area consists of 24 counties in the extreme northeast corner of the state. The undulating to rolling topography is composed of low-fertility sandy soils. Since 1930, there has been a continuous shift in the type of agricultural enterprises conducted in this area from row crop farming to dairying, beef cattle, poultry, timber and specialty crops. Per acre land prices increased from $118 in 1963 to $142 in 1965. Sixty percent of the sales in 1965 involved tracts of land less than 100 acres in size, indicating uses such as farm enlargement, part-time farms, speculation and recreation. Approximately 30 percent of the purchases were by out-of-county buyers with the largest number residing in Harris and Dallas counties. Demand for recreation land is concentrated primarily in the southern part of this area near Toledo Bend Reservoir and Sam Rayburn Reservoir. East Texas Timber The East Texas Timber area is composed of 12 counties in the southeastern portion of the state 9 directly south of the East Texas farming area. The soils are predominantly sandy except in river bottoms where the soils are heavier. The climate is humid, and the topography is undulating to rolling. Pine timber interspersed with hardwoods covers 75 to 80 percent of the land area. The primary agricultural enterprises are timber, beef cattle, dairying, poultry and some specialty crops. Per acre land price increased 75 percent between 1963 and 1965, from $116 to $203. Fifty percent of the transactions involved tracts of land between 20 and 50 acres in size. Out-of-county buyers purchased 55 percent of all land sold, and 25 percent of all buyers resided in Harris County. A large portion of the per acre price increase was the result of urban demand for recreational land. The northern part of the area includes portions of Sam Rayburn Reser- voir, Toledo Bend Reservoir and Lake Livingston. These three reservoirs, containing approximately 500,000 surface acres of water in a pine forest setting, have a tremendous appeal for outdoor recreation. Post Oak This area consists of nine counties lying within the hardwood covered portion of the East Texas Timberlands. Two main groups of low fertility sandy soils are typical of the upland area. One is deep sand with porous subsoils, and the other is shallow sandy loam with dense, slowly permeable subsoils. Several rivers-the Brazos, Colorado and Trinity-cross or border the area and provide well-drained productive bottomland. Agricultural enterprises include beef cattle, dairying, cotton, grain sorghum, corn, forage crops and some specialty crops. A large portion of the upland provides excellent deer habitat. Per acre land prices increased 5 percent, from $114 in 1963 to $120 in 1965. Sixty-six percent of all 10 sales were to out-of-county buyers, and 40 percent r . all buyers were from Harris County. Fairly dense deer populations exist in portio of this nine-county area, attracting hunters from ne by metropolitan centers. During the 1964-65 seas approximately 35 percent of the entire area was lea Q for deer hunting. In Brazos County a study t 1 quantitatively measured the influence of deer on la values showed that the presence of deer in shoota numbers has been reflected in land prices. Buy have been paying $10 to $50 more per acre for la with deer than for comparable land without deer, is assumed that land market activity in other 1P Oak counties reflects some value for wildlife in la prices. Therefore, urban demand for land, deer, 0t if forms of outdoor recreation, investment and specu tion are responsible for the per acre land price ' crease since 1960. Coast Prairie The Coast Prairie is composed of 16 count' bordering the Gulf of Mexico and extending eastw, from the Guadalupe River to the Louisiana bord The topography is low-lying and practically flat. climate is humid, with annual rainfall ranging fr 35 inches in the west to more than 50 inches in _ east. A portion of the area is suited only for f crops and irrigated crops, while other land is sui ' . only for grazing. The primary agricultural enterp f are rice, beef cattle, dairying, cotton, corn, ; sorghum and forage crops. Although per acre land prices remained relativ stable between 1963 and 1965, an urban influe, exists. Forty percent of the buyers were out-of-cou residents who purchased tracts of land ranging fr 25 to 2,000 acres. The urban participation in _, land market was not reflected in increased land pli LIMITATIONS OF THIS STUDY A study conducted utilizing sample data gathered from public sources has certain limitations. The study does not propose to reflect the average price of any particular farm or ranch and it would be improper to rely upon the price data as reflecting the market value of even a part of a county. Many more small properties are sold than large properties in most areas during a given year. Because small properties usually bring more per acre than large properties the price is influenced upward. The data are not useful for determining value based upon an agricultural pro- ductivity concept but rather reflect market value for broad general areas. n: ‘i Texas Agricultural Experiment Station, R. E. Patterson, Director, College Station, Texas