17 years at around a 30% return on the money. Course thats inflated currency thats is constantly devaluted. I'd keep the land!

Looked at land for the last 10 years in west Texas. . Started with just a dream and finally started making enough money to convince the wife to "invest" in 2013. Prices have increased between 80-120% depending on improvements etc. Bought my first place for $825/acre, raw land with a well. Got on the county tax appraisal website and found out who owned the land behind us. Has a year round creek going thru the middle of it, fences in fair shape with a livable house but needs dozer work. Approached them to see if they would sell. Their price was $1250/acre, non-negotionable. Waited about a year and decided to pull the trigger at $1250/acre based on the average cost per acre on both places at just over $1030/acre. Have since leased for grazing that pays 2/3 of the payment. I found 3 live springs (run year round) once the Dozer work was complete. I knew they were there because the high side of the creek slowly ran. Low side had a higher flow. Main reason I waited a year do I could check the creek flow during the summer heat and irrigation season. It's the only live water source in the area other than the brazos.

Land down the creek from us went up for sale while I was purchasing the creek land. Only listed for about a month and sold for $1567/acre. Only had a old coral and a well. No houses or livable structures. The way I see it, land is better than the stock market. And if I liquidate, I can at least break even for a quick sale.

Goona be hard to pass up a sale when the prices get over 100% return on the investment. I expect within 5 years, it will appreciate to that 100% return and should be at 150% within 10yrs.

Rob,

I paid $700/acre for my original 200 acre ranch in 2012 and was offered $450K for it a couple months ago. When I told him the improvements I made, he upped the offer to $500k. I did not sell.

There was a large article in the Fort Worth Star Telegram today by an investment person who stated that "right now" is the best time to buy a ranch because the prices have fallen to 2008 levels. The reason he states is because of the price of oil. Now that it is below $30 a barrel, according to him, many of the ranches will have to be sold off because they were bought when oil was at $100. So, if you still got some of that oil money hidden away, "i did not get any myself," now would be the time to go find yourself a ranch.
I'm wondering if oil money has anything to do with the price per acre of small hunting properties of under 100 acres, or if it has no affect on those.

I read it as more that he was prognosticating they might fall to 2008 levels - pretty sure the 2015 A&M studies cited in the article showed the prices still on a healthy upward curve, but the article notes land prices traditionally lag 2-3 years behind O&G declines.

I just saw you cited FW paper - article I read on same subject was the Dallas Morning News.

I thought is was an interesting article but lacked insight on whom actually buys land. In other words. A small segment was bought with oil money. Land I see for sale for the most part is flip land.

yep, it is crazy, good investment for us, but this place I'm never selling.

Here's the article:

http://www.nytimes.com/2016/01/19/busine...ml?ref=business

Investment fund betting on low oil will cause price on LARGE ($10-25 million) ranches to go down. He may be right, but they haven't gone down yet (he's waiting on that 1-3 years) and not sure how that applies to small tract recreational land close to metro areas. my bet I don't expect that type of land to keep going up at recent rates, but it won't crash back to the 2008 levels either. So in my area...

2008: $800

2012: $1,200

2013-14: $2,100

2016: $3,500

So I think possible a correction could take us back to $2,000 levels, but I don't think we'll ever see close to $1,000 again. I also don't think next 3 years we'll see 300% appreciation like we did last 3 years, that would put land above $10k. With rates rising I think you'll see most land like this hover $2,000-4,000.

I just sold some land for 5 times what I paid for it 4 years ago. Well technically I did a land swap but none the less I don't foresee prices taking a huge hit,

In this part of Texas, oil money was directly or indirectly responsible for the majority of ranch sales.

That said, the guy must have been prognosticating (because boots on the ground know that prices are currently firm), and as of now, O&G prices won't drag ranch value to 2008 levels. It was a total economic recession that was responsible for the 2008 drop, not O&G prices.

Yelp but most of the land bought with oil money was expansion(cash). Or small properties.

North of I-10 its majority baby boomers retirement places.

A lot of the ranchers that had places in the sweet spot of EF bought places just north of the sweet spot. Produced quite a bump in brush country ranch values both large and medium.

I just read an article on MSN in regards to land prices and the economy and some investor along with T Boone Pickens is predicting land prices to decrease by 25% in the next couple of years with the decline of fossil fuels, rising interest rates, and overall economy. These guys are loaded and of course buy big during periods of recessions and are planning on buying up tens of thousands of acres, especially in Texas where they predict land prices will be affected the most over the next couple of years.

There will always be up and down markets in all sectors of investing including real estate in Texas.

Those that are well capitalized and willing to take risk will be rewarded over the long term. Simple, but not easy.

Supply & Demand

The farm and ranch land north of prosper and to the east has stabilized and going down slightly. Any dip of 25% will have buyers coming out with cash in hand and will drive the price back up. Recreational land that has good wildlife is going up daily.

You are totally correct. A "market" is named that because prices are variable. Stock MARKET, real estate MARKET, grocery MARKET and on and on. There is an old saying that remains true forever and many people have gotten wealthy if they do it - BUY when there is BLOOD IN THE STREETS. Anybody can buy when the market is is hot and smoking. It takes kohunas to buy when things are at rock bottom. But that is where the money is made. There is a reason you have heard the saying "cash is king" - holding cash and jumping in when all looks horrible is the trick. Very few have the discipline to do it.

Rex will wait for that rebound all day long if it even happens. He has held it for this long so what is another few years.

My understanding was that the article was anticipating a drop per acre for the larger parcels of land, multi-thousand acre ranches vs. smaller acreage ones. The gist was that the larger ranches are largely run based on oil revenue returns. I think there may be some validity to this but probably not to the tune of 25-50% per acreage price reductions.

Around this area I have never seen the prices go down. I have seen them stabilize for a time but never be reduced. Some ranches were sold off in say 10 acre parcels and were advertised as gated communities with a lot of restrictions. These tracks sold for way more than any of the land around them and many who bought into this and tried to roll them lost.

In 20 or 30 years, kids today will be saying, "I wish I'd had money to buy some land back when it was $3000 an acre!" I know I'm saying that now about land in Arkansas I could've bought for $150-200 per acre when I was 20 years old.

Seems people are not really paying for so called hunting land. They are paying for an investment looking for a quick return if they are selling it a few years later. That is not enough time to do any wildlife management. I have a hard time calling the small acreages such as 50 acres true hunting land if you are wanting big deer. There are diamonds out there though. There is really not much for sale over 500 acres right now. Lands of Texas is only showing several in the counties I hunt. And some of those have been listed for 4 years now. I know guys have been doing land swaps or selling to neighbors so those are never disclosed.

I notice asking prices in my area for 200+ acre rural tracts start at about $3000/acre. It goes up from there depending on the tract (pasture, water, eye appeal, etc.) That sounds about right as I know a cutover tract across the road from my place sold for somewhere in the $2500/acre range. It had nothing to commend it other than hunting/recreation. Nothing.

That would have been unthinkable 10 years ago. Lots of market influence from the urban folks buying land that just wasn't much of a factor back then in my area - land was mostly traded locally.

Money tied up in land makes perfect sense. Key word is INTRINSIC value.

I have 110 acres for sale for 2500 within 2 hours of the metroplex in Archer City. PM if you are interested!