When you think of Texas, the images that likely come to mind include wide-open spaces and rolling hills, which contribute to its reputation as one of the most affordable locations for property and building a new home.
Whether your tastes trend toward rural rolling hills, sea-level plains, or burgeoning suburbs, you can find a desirable place to settle down amid Texas’ vast and varied topography.
Aside from landscape, there are several other variables to consider before purchasing land. Variables such as proximity to jobs with the opportunity for professional growth, a desirable school district, as well as the attractions, amenities, and resources you might use on a regular basis. Other important factors for prospective land buyers in the Houston area to consider include cost and whether the characteristics of a specific piece of property make it a worthwhile long-term investment, especially when building a new custom home.
What Is the Cost of Land in the Houston Area?
The city of Houston is the county seat of Harris County, although the surrounding suburbs also spread slightly into the adjacent Fort Bend and Montgomery counties. In recent years, it’s become increasingly difficult to find large tracts of available land near Houston, as well as other major metro areas like Austin and Dallas-Forth Worth. As more people decide to leave the city and head toward suburbs and rural areas, you can expect the cost of land in those areas to continue to increase.
In the first quarter of 2021, the average cost of land in Harris County was about $21,000 per acre. The Gulf Coast region, where Harris County resides, averaged $11,675 per acre of small land sale in 2020.
Location plays a large role in determining the price of land, more so than type or aesthetic appeal. That being said, the rural properties that have been improved by interior roads, selective clearing, and fences tend to bring in a premium price. Otherwise, there is very little existing cropland in the vicinity of Houston or its adjacent suburbs. The little cropland that is present around Houston is typically valued for lifestyle farms or rural residential use, rather than agriculture use.
Houston land price averages are not included in the rural land reports. Further, the rush to purchase rural tracts since 2020, and the following steep reduction of rural land inventory, have not affected Houston land inventory. In fact, according to Land Watch, Harris County ranks 15th of the 254 counties in available land properties, although this data does include hunting land.
Understanding Current Land Prices in Texas
Land prices in Texas are reported under two distinct categories: rural land sales and small land sales. Small land sales in Texas are defined by a sale involving a tract that is 200 acres or less. That is, except in Far West Texas, where the definition includes land sales up to 8,000 acres. The division of reports is due to the stark division of use and buying trends. Rural land purchase trends are typically guided by farming and manufacturing activity, whereas small land trends tend to be driven by residential, recreational, or small farm use.
Texas is typically classified by seven distinct market regions: North Panhandle and South Plains; Far West Texas, Big Bend, and Trans-Pecos; North Texas, Central Texas, and South Central Texas; North Texas, Northeast Texas, and Piney Woods; Coastal Prairie-Gulf Coast-Brazos Bottom (which includes the Houston, Bellville, and Brenham areas); South Texas and Coastal Plains (including the Rio Grande Valley); and Austin-Waco-Hill Country.
Each region in Texas has its own dramatic landscape and unique character, which not only affects the average price of land but the feasibility of building a new home. For example, in 2020, an acre under the small land sales category in the Gulf Coast region was $11,675 per acre; whereas in the far western part of the state, the cost was closer to an average of $450 per acre.
How Much Does an Acre of Land Cost in Texas?
Rural land buyers have changed the market trend landscape in 2020, which market researchers have called ‘historic’.
Overall the average rural land price per acre in Texas in 2021 was about $3,725, up a massive 25% over 2020’s overall average of $3,064. The 2020 average was an understandably modest 3% increase from the 2019 average of $2,972. Over the past few years, the cost had continued to climb, simultaneously impacting the price to build a new home, which is consistent with national real estate markets.
The land in Texas is diverse, however, and the price per acre depends on several factors, including the size of the overall plot, demand, terrain, and availability. However, due to the rapid influx of urban dwellers purchasing rural land, the demand in Houston has risen while availability is reaching the bottom, causing the price per acre to soar.
Small land sales jumped an incredible 34% in volume in 2020. The volume increase was experienced across all seven regions, but most dramatically in Far West Texas and Austin-Waco-Hill Country. The average price per small land acre grew in 2020 by 3.8%, mirroring the rural land acre rate increase, to $6,471.)
As the amount of land sold increased in 2020, the average size for small land sales in Texas continued to decrease, dipping 3% to 32 acres in 2019 and again to 30 in 2020. Market analysts speculate that these trends are again driven by urban dwellers, who want open plots of land but not for agricultural or commercial use. The average price per small land sale acre in Texas continued to rise into 2021, however, the annual report has yet to be released for a more detailed look at those numbers.
Texas Realtors chairperson Cindi Bulla projects that there are several possibilities for the future of small land sales in Texas, given current data and the COVID-19 pandemic. She expects small land purchases will continue to be impacted by certain trends, such as residential migrations from dense metropolitan areas and continued rural and suburban development.
Where Is Land the Cheapest in Texas?
Land in both the West Texas region and the Panhandle and the South Plains region is the most economical, especially if you’re looking for farm or ranchlands. Although Far West Texas continues to be the most economical by far, this is because the land is typically purchased in very large tracts by manufacturing and oil companies, not individuals for agriculture, suburb development, or personal use.
When you’re weighing the cost of land, it’s also important to take into consideration the purpose of your investment, what you intend to use the land for, and what sort of return you can expect in the future. As the footprints of metropolitan areas continue to grow, the demand for the surrounding rural land is expected to keep increasing. That means that while properties in North and South Texas and the Coastal Prairie are higher on average than other regions, they could be considered a more worthwhile investment.
Choosing Land for Home Building in Houston
When you’re building a luxury custom home in the Houston area, your land purchase is nearly as crucial as carefully designing and constructing the structure itself. The property you choose affects the value of your new home, the feasibility of construction, and the overall project price. You want the quality and location of your land to complement the design and style of your home, as well as your lifestyle and future goals. Once you’ve found the right land for your investment, Southern Green Builders can help you build a luxury home to match. Our goal is to join our expertise with your vision to create the perfect space for the next phase of your life.