July 18, 2005
The Hill Country land rush

Damn. I had no idea that there was such a real estate boom going on in Central Texas. I mean, I knew that Travis and Williamson Counties were hot stuff, but that's not what this is about.


In the Kerr County resort community of Hunt, land shoppers are sometimes floored by the asking prices, said real estate agent Emily Petty.

"They still think that they should be able to come here and buy a little cabin on the river for $150,000, and they are just appalled," Petty said. The shock is felt most by those who don't preview land on the Internet.

"You won't find much under $200,000, $250,000 out here," for land only, Petty said.

[...]

Rural land is appreciating throughout the state the median price was up 15 percent in the first three quarters of 2004 compared to the same period in 2003.

But some parts of the Hill Country showed even higher increases, according to A&M data that showed typical prices were up 27 percent in the western hills around Real County, and up 24 percent in the Highland Lakes, where the number of transactions jumped by 54 percent.

Rural land in the northern Hill Country near Lampasas rose 13 percent, though fewer sales were recorded last year as the number of highly desirable tracts diminished.

In the region's southern counties Kendall, Kerr, Bandera and Blanco prices rose 11 percent in the first three quarters of 2004. Although that was less than the statewide trend, it was based on only a 7 percent increase in transactions, another reflection of the tough market for buyers. Even so, the area's median price has remained among the highest in the state, $4,448 per acre, data shows.

"Buyers will get focused on an area like that and pretty soon there aren't very many attractive properties for sale anymore, so they start looking further and further afield," said research economist Charles Gilliland.

That's why areas in the western Hill Country, such as Real and Uvalde counties are increasingly popular, and it's also why people who set out to buy a waterfront cabin wind up with "river access" land not directly on flowing rivers or creeks or they settle for scenic land away from the hottest areas, experts said.


I haven't been to any of that area in awhile - most of the time I spent out that way was while I was at Trinity - with the exception of New Braunfels (woo hoo! Schlitterbahn!), which has been growing by leaps and bounds recently. It's definitely some beautiful country - if your only impression of Texas is Houston or Dallas, you owe yourself a trip out there to see it for yourself. It's not a surprise that the land has been getting snapped up left and right, but this sort of thing still drops the jaw:

Nowadays, all-cash purchases of $500,000 or $1 million are routine, although borrowing remains common, real estate agents said.

Whew. I think the rule of thumb for real estate is always "whatever it is, you should have bought it ten years ago".

People from Florida, California, Arizona and a smattering of foreigners have joined in the Hill Country land rush. The influx some settlers, some speculators raises eyebrows, but the interest is understandable, Gilliland said.

"They may be casting a broader net, coming out here and seeing if they can probably buy more here than they could get at home," the researcher said.

[...]

[M]any buyers are looking for more than an investment, said real estate agent Shirley Shandley in Leakey. They want a secluded getaway, and some find the region to be a bargain compared with other resortlike areas of the United States.

"A lot of people come out here and say 'Oh, we didn't know Texas looked like this hills and all that stuff,' " she said. "We get people from Arizona and California, and they're real impressed with our prices, and our taxes are less than what they're used to."

"The hardest part is finding good listings. It seems like it's getting harder every year. There's less and less riverfront coming up and more of it gets tied up into commercial use," like lodges, she said.

As a result, Shandley said, "the country here is changing."

A longtime ban on liquor sales was recently lifted. Businesses are popping up just like land prices.


I will be very interested to see what the longterm effects of this kind of immigration will be. Check back in a decade and find out, I guess.

Posted by Charles Kuffner on July 18, 2005 to The great state of Texas | TrackBack
Comments

Tim and I are hoping to buy something out in that general area, but we're trying to stay out of the I-35 corridor, just to keep away from the really fast growth. It's not going to be easy to find something we can afford, though. But we're looking at it as a part of our retirement plan.

Posted by: Sue on July 18, 2005 7:42 AM

I'm starting to despair of ever being able to afford to buy land in my own state.

Can we start a "badmouth Texas real-estate" campaign?

Please, rich New Yorkers and Californians, drive up the prices in your own states. Texas sucks, don't buy here.

Posted by: Locutor on July 18, 2005 11:14 AM

My wife's family has had a cabin on the Frio river near Leakey (pop. 387) for at least 40 years. It's part of a larger land grouping (dunno the right term) where all those involved share river access, and the families there (some live there year-round, others, like my wife's, have had 4 generations visiting at holidays) are pretty tight.

A few years ago, my in-laws bought up several acres adjacent to their property (across the road, not riverfront but with river access rights) for the express purpose of keeping developers out of it. They've set up a wildlife refuge there.

In fact, I was there over the 4th, and we all had a blast in the river. The 100-degree weather is always a shock to my Minneotafied constitution, but having a cold, spring-fed, no motorized vehicles river right there sure does help!

Posted by: CrispyShot on July 18, 2005 11:55 AM

You know how I know this is really happening? I moved to Texas (Waco area) after working 10-years in Alaska. Alaska is a good place to make money but it's a rather harsh and isolated place to retire. So a lot of my government co-workers would buy retirment property in the lower 48 one they got to that late 40s-early 50s age when you start thinking about such things. Then they would sit on their little retirement spreads and visit once or twice a year until full retirement 10 years later. Used to be that it was most common to hear people buying island property in Puget Sound or ranch property in Central Washington, Oregon, Idaho, or Montana. Or condos in Hawaii. Now places like the Washington's San Juan Islands or Montana's Bitteroot are totally out of reach and people are looking further to the Hill Country. Just this past year I personally know three different Alaskans who have bought in the hill country with an eye towards retirement. All are in their late 40s or early 50s. Ten years ago no one would have ever imagined buying in Texas. Now it seems to be the rage.

Posted by: Kent on July 18, 2005 12:01 PM

I just bought 29 acres on a ranch near Blanco in early 2005. A lot of the ranchers are subdividing up their ranches into 25-50 acre lots and cashing in. I expected to pay 4 to 5k per acre but for an absolute killer lot with a 270 degree view and beautiful oak trees I paid 7500 per acre. I looked around Fredericksburg but they were going for 11 to 17k per acre and there was oak wilt, and the views were not there. That was last spring, prices have shot up all over since then, up to 19 to 25k per acre on some ranches. You have to stop thinking about it as price per acre. You are not going to raise cows on it, are you? This is a homesite, its value is based on its appeal to you as such. I wont retire for a couple of years, but I can tell you that there is a tsumani of retirees headed for Texas as the boomers start retiring. Lets see..lots of sun, reasonable prices, friendly people with strong values, and guess what else: NO INCOME TAX. And for the naysayers that say yeah but there is ahell of a property tax, I say you aint seen property taxes until you have lived in New Jersey. Texas is still a bargain taxwise compared to NJ property taxes & income taxes!

Posted by: JoseAngel on September 27, 2006 7:53 PM