The Shifting Dynamics of Small and Large Land Tracts

To understand rural land market dynamics in Texas, it is vital to distinguish between the “large land” market and the “small land” market, which is usually those under 35 to 160 acres depending on the region.

The Texas Real Estate Research Center defines the maximum acreage of small tracts by region (Table 1). The minimum tract size for each region is 10.01 acres. Over the last ten years, small tracts comprised more than half of total annual sales (55 to 60 percent) statewide. 

The small land market serves a more diverse mix of buyers, including families looking for homesites, recreational users, flexible investors, and farm managers looking to expand nearby operations. Since these tracts draw a much larger pool of potential buyers, the small property market traditionally commands higher per-acre prices than neighboring large tracts.  

Small Land: The Engine of Market Momentum 

The rebound in prices for small tracts began in 2024 and continued through 2025. The rebound in sales and total acres sold did not occur until 2025.

As of fourth quarter 2025, the small land market also showed positive year-over-year (YoY) trends across most regions:

• Region 1 (Panhandle): Small land prices rose to $9,460 per acre, a 7.59 percent YoY increase, with sales volume up 8.8 percent. 

• Region 3 (West Texas): Prices for small tracts hit $8,330 per acre, up 8.5 percent from 2024, with a healthy 10.94 percent rise in sales volume. 

• Region 7 (Hill Country): Prices reached $17,529 per acre, a 7.7 percent YoY gain, though sales volume growth was more modest at 2.49 percent. 

The primary outlier was South Texas (Region 6), where the nominal price for small tracts fell 11.91 percent YoY to $14,900, with a slight 1.39 percent increase in the number of sales. This highlights the regional volatility that can occur even in a resilient statewide market.

Large Land: Record Prices and Stabilizing Volume 

The statewide nominal price per acre reached a new record high of $5,214, representing a 6.56 percent YoY increase. This price strength was bolstered by a significant turnaround in sales activity. The number of sales rose 8.16 percent YoY, marking the strongest quarterly growth the market has seen since late 2021. 

Regional standouts in the large land sector included: 

• West Texas (Region 3): Prices jumped 13.5 percent YoY to a record $2,878 per acre, fueled in part by a spike in demand for land with potential for data centers and energy projects. More importantly, attractive land in this region is still considerably more affordable than all four regions to the east and south.  

• South Texas (Region 6): This region saw a remarkable turnaround, with sales volume surging 25.2 percent and total acres sold increasing by 21.5 percent YoY. 

• Austin-Waco-Hill Country (Region 7): Prices reached a new high of $7,911 per acre, an 8.15 percent YoY increase, with sales volume also rising by more than 10 percent. 

Side-by-Side: Comparing YoY Trends 

Comparing the two datasets reveals that while both segments are showing signs of stabilization, they are responding to different pressures (Table 2 and 3). Large land sales volume (+8.16 percent) outperformed the growth seen in several small land regional segments, such as Region 5 (+5.49 percent), Region 6 (+1.39 percent), and Region 7 (+2.49 percent).

However, total acres sold among small land tracts (+5.42 percent statewide) well outpaced acres sold among large land tracts (-0.32 percent statewide), though most regions were up in both size segments. Region 4 was an extreme exception to this, where acres in small tracts were down -5.57 percent and up 18.97 percent in large tracts. Tables 2 and 3 show regional and statewide metrics for small and large tracts.

Note: Size is median, PPA is nominal price per acre, YOY% is annualized percentage change, acres represent the total annual acres sold.
Source: Texas Real Estate Research Center

Market Standoff and Economic Drivers 

Overall, the market navigated a fascinating path through 2025 with both large and small segments ending with statewide increases in price and sales volume. The market for large tracts ended the year with an especially impressive display of resilience that defied our baseline forecast for YoY changes. While the state faced a multi-year slowdown in activity since the post-pandemic stampede, the results for 2025 suggest a market that has transitioned from a slump into a more stable, albeit higher-priced phase. 

Despite these improvements, the market continues to face friction from elevated interest rates and the cumulative effect of the steep price appreciation seen since 2020, where statewide prices more than doubled. 

A psychological factor currently contributing to market friction is “price stickiness,” or “money illusion.” Many sellers remain anchored to the peak prices of 2022–23 and are often unwilling to lower their asking prices, leading to a standoff where properties that are not of superior quality sit on the market longer. Financial factors, such as the interaction of prices and borrowing costs, tend to weigh more on the market for smaller tracts than large tracts. There will continue to be important differences in rural land markets by region and size segment. 

If you want to learn more about this and many other related topics, attend our annual Outlook for Texas Land Markets conference next month in San Antonio. The full agenda is available online and registration is open now, but time is running out. 

Views expressed on The 338 are those of the authors and do not imply endorsement by the Texas Real Estate Research Center, Division of Research, or Texas A&M University.