Texas Land Market Developments -- 2016Charles E. Gilliland Ph.D.Research Economist Real Estate Center Texas A&M University

Herbert’s Taco HutNew Braunfels, TexasAugust 25th 2016

Current Land Market Scuttlebutt

• Prices up in most markets

• Energy areas weaker

• Farming areas see prices rise, volume fall

• Mixed signals

• Get ‘em while they are left!

Texas Rural Land Price Per Acre

Four Quarter Moving Average Total Acreage Sold

Generated by the SAS System ('Local', X64_8PRO) on August 16, 2016 at 11:21:58 AM

Texas Rural Land

Texas Rural Land StatewideFour Quarter Moving Average Total Dollar Volume of Sales

Texas Rural LandStatewideFour Quarter Moving Average Total Dollar Volume of Sales

Texas Rural Land Real Price and Volume of Sales

Four Quarter Moving Average Price Per AcrePanhandle - South Plains

Generated by the SAS System ('Local', X64_8PRO) on August 16, 2016 at 11:22:16 AM

Four Quarter Moving Average Price Per AcrePanhandle - South Plains

Generated by the SAS System ('Local', X64_8PRO) on August 16, 2016 at 11:22:29 AM

Texas Rural Land

Four Quarter Moving Average Total Dollar Volume of Sales -- Panhandle - South Plains

Four Quarter Moving Average Total Acreage SoldPanhandle - South Plains

Four Quarter Moving Average Price Per AcreTexas Rural Land -- Austin - Waco - Hill Country

Four Quarter Moving Average Price Per AcreAustin - Waco - Hill Country

Generated by the SAS System ('Local', X64_8PRO) on August 16, 2016 at 11:23:05 AM

Texas Rural Land

Four Quarter Moving Average Total Dollar Volume of SalesAustin - Waco - Hill Country

Generated by the SAS System ('Local', X64_8PRO) on August 16, 2016 at 11:24:04 AM

Four Quarter Moving Average Total Acreage SoldAustin - Waco - Hill Country

Latest Regional Quarterly Results

• Panhandle & So. Plains

• Far West Texas

• West Texas

• Northeast Texas

• Gulf Coast & Brazos Bottom

• South Texas

• Austin – Waco – Hill Country

Year to year Quarterly Dollar volume

+5.5% -2.2% -27%

-43.5% -34.7% -41.3%

+9.5% +2.9% +8.5%

+8.13% + 3.0 +3.5%

-0.4% -0.7% +11.0%

-3.5% +0.4% +27.6%

+8.1% +2.4% -11.1%

Land Market Issues

• Economy

• Property rights • Coyote Lake Ranch v City of

Lubbock • Duarte Nursery v Corps of

Engineers

• Election

• Oil prices will go • Up • Down more

Economy

Economy

Economy

Economy

Property Rights – Coyote Lake Ranch v City of Lubbocck

• City bought water rights in 1953

• Has 7 existing wells

• Wanted to expand – mowed grass to begin

• Supreme Court rules that Accommodation Doctrine Applies

• Landowners celebrating

• Oil and gas lawyers in a tizzy

Property Rights – Duarte Nursery v Corps of Engineers

Property Rights – Duarte Nursery v Corps of Engineers

• WOTUS

• 450 acre pasture

• Converted to wheat

• Plowing exemption

• …relocated earthen material into ridges • Unlawfully raising the elevation of the soil in the wetlands• “fill material”

Property Rights – Duarte Nursery v Corps of Engineers

• Court • Tillage wasn’t an “established ongoing” farming activity

• Changing the use requires a permit from the Corps

• Pacific Legal Foundation continuing the fight

Election

Forecast Model System Elasticity

• System Elasticity

• Long Term Elasticity

• Percent Change in Response

for a 1 Percent Change in the variable

• Ceteris Paribus

Price Quantity

Oil price + 0.251 - 0.194

Personalincome + 0.403 + 0.595

Oil Prices

• Oil prices 2018 • Down more• Up

Oil Price Forecast Low High

35 -9% -30% +17%

60 -5% -25% +19%