Understanding the Market Data
This quarterly, Texas Rural Land Markets, analysis examines verified rural land transactions across Texas through the first quarter of 2025. The data represents a sample of sales for large rural tracts, with minimum sizes varying by region to reflect local market characteristics. All statistics use median prices and moving averages to smooth short-term fluctuations and reveal underlying market trends.
Important Note: These statistics indicate past market conditions and general trends. They should not substitute for professional appraisals or local market studies when evaluating specific properties.
Statewide Market Performance
Texas rural land markets and the values continued their upward trajectory in the first quarter, with the statewide median price reaching $4,827 per acre—a 2.68% increase from the previous year and 1.07% above year-end 2024 levels. This pushed prices beyond the $4,700 range that characterized much of 2024.
Market activity presented a mixed picture. While total acreage sold increased 6.65% and total dollar volume grew 9.51% year-over-year, the number of individual transactions declined 10.01%. This suggests buyers are pursuing larger parcels, evidenced by the typical tract size expanding dramatically to 2,080 acres—a 38.95% increase driven primarily by several substantial sales in Far West Texas.
The five-year compound annual growth rate moderated to 9.95%, down from 10.7% a year ago but still well above historical norms. When adjusted for inflation, land values maintained their purchasing power at $654 per acre in 1966 dollars, matching the previous year’s real value.
Despite these positive indicators, overall market activity remains significantly below 2019 pre-pandemic levels, with sales volumes down in four of Texas’s seven rural land regions.
Regional Market Breakdown
Panhandle-South Plains (Region 1)
The region posted solid gains with prices rising 3.92% year-over-year to $1,831 per acre. However, market activity showed signs of softening as the number of transactions dropped 15.08% to 304 sales—the lowest level since early 2017. The typical tract remained stable at 386 acres, while total dollar volume held essentially flat as reduced sales volume offset price appreciation.
Far West Texas (Region 2)
This region continues to struggle with weak demand and limited transaction volume. Prices declined sharply by 18.04% to $559 per acre, while sales activity dropped 17.2% from already depressed levels. The small number of transactions makes trend analysis challenging, as individual large sales can significantly skew results. Typical tract size ballooned to 15,635 acres, contributing to a 58.63% increase in total dollar volume despite lower prices.
West Texas (Region 3)
West Texas emerged as the strongest performing region, with median prices reaching a new record of $2,662 per acre—up 12.89% year-over-year. This region also led in dollar volume growth at 19.28%, generating $198.87 million in total transactions. The combination of higher prices and increased tract sizes (up 12.48% to 434 acres) drove strong performance despite a 4.18% decline in the number of sales.
Northeast Texas (Region 4)
Market conditions remained challenging in Northeast Texas, where sales volume plummeted 29.29% year-over-year to just 746 transactions—only 27% of the 2021 peak and the lowest level since 2013. Despite this weak activity, prices edged up 1.69% to $8,419 per acre, maintaining the region’s position as having some of the highest per-acre values statewide. The five-year growth rate remains robust at 11.52%.
Gulf Coast-Brazos Bottom (Region 5)
This region demonstrated strong momentum with prices climbing 11.04% to $10,289 per acre—the highest absolute values in the state. Unlike other regions, Gulf Coast-Brazos Bottom saw increased market activity with sales volume up 2.26% and total dollar volume surging 21.96% to $203.63 million. The combination of price appreciation and volume growth suggests healthy underlying demand.
South Texas (Region 6)
South Texas experienced a price correction, with values declining 5.73% to $5,903 per acre. The inflation-adjusted decline was even steeper at 8.15%. However, the region showed signs of stabilization as quarterly prices rose for the first time since early 2024. Total dollar volume fell 6.82% to $131.45 million, though the number of sales remained essentially flat.
Austin-Waco-Hill Country (Region 7)
The Hill Country market appears to be consolidating gains, with prices up a modest 1.32% to $7,291 per acre. This represents a 1.88% decline from the peak reached in mid-2024, suggesting the region may have found a temporary ceiling. Market activity remained subdued with total dollar volume declining 4.94% and total acres sold down 6.18%. The market seems to be in a holding pattern after several years of strong appreciation.
Market Outlook and Challenges
The Texas rural land market faces several headwinds that continue to dampen activity levels. Higher interest rates compared to the 2019-2021 period represent the most significant challenge, reducing affordability for many potential buyers. Combined with elevated land prices and savings eroded by recent inflation, these factors have pushed many participants to the sidelines.
Policy uncertainty adds another layer of complexity. Market participants are watching for potential changes in federal policies regarding deregulation, tariffs, taxation, and government spending, though the timing and magnitude of these changes remain unclear.
Forecast and Expectations
Current modeling suggests the market may face modest headwinds in the near term. Statewide prices are projected to decline approximately 1% through the end of 2025, with further declines of 3-4% possible over the subsequent two years.
For transaction volumes, the forecast anticipates a 3% decline in acres sold through year-end, followed by a gradual recovery beginning in 2026. The model suggests volumes could return to current levels by the third quarter of 2026, with continued modest growth into 2027.
These projections assume steady economic conditions based on current forecasts, though unexpected changes in key variables such as Texas personal income, interest rates, and oil prices could alter the trajectory significantly.
Key Takeaways
The first quarter of 2025 revealed a Texas rural land market in transition. While prices continue to advance in most regions, transaction volumes remain well below historical norms, indicating persistent demand weakness. Regional variations are pronounced, with West Texas and the Gulf Coast showing particular strength while Far West Texas and Northeast Texas face significant challenges.
The market appears to be seeking equilibrium after years of rapid appreciation, with many participants adopting a wait-and-see approach amid economic uncertainty and affordability constraints. Despite near-term headwinds, long-term confidence in rural land ownership remains intact, suggesting the current pause may be temporary rather than indicative of fundamental weakness.
If you are thinking of buying land in 2025 check out our recent blog about the buying process.
Data used for the report are from the Texas A&M Real Estate Center.
