SAN ANTONIO (San Antonio Express-News) – Economists with the Real Estate Center at Texas A&M University are noticing a large interest in Texas land from baby boomers, the generation now driving the demand in the state’s land market.

Both the boomers and big-money investors have driven prices higher. People nearing retirement are prowling for 100-acre properties or smaller, said Dr. Charles Gilliland, a research economist with the Center.

An acre in Texas cost an average of $2,190 in 2007, up 20 percent from the year before, according to Real Estate Center data. Land prices of late are experiencing double-digit increases on a yearly basis. However, Gilliland says this pattern cannot continue forever.

Boomers have even shifted the market, as many of them are searching for smaller pieces of land. The average transaction last year dropped to 80 acres, a historical low. In 2006, the average land sale was for 98 acres.
While both groups of potential buyers are, to a large degree, on the sidelines watching the stock market and the presidential election, Dr. Mark Dotzour, chief economist at the Center, said many buyers continue to look to land as a tangible asset to turn to when things look uncertain elsewhere.

For more on the Texas land market, read "Sizzling Land" in the July 2008 issue of Tierra Grande magazine.