Land Values Lead the Way in the South

Land Values in the South

For those exploring luxury rural real estate, the South is a region to watch. Nationwide, rural land values went up 4.7% this year, with the average price hitting $5,570 per acre[i] – a steady climb. While the growth is a bit slower than in past years, the South continues to perform well, making it a standout region for buyers.

In 2024, rural real estate values in Texas and the South experienced growth, averaging $4,600 per acre in select areas[ii]. Recreational land is becoming more popular, thanks to its appeal for things like hunting and outdoor activities. The luxury ranch market in Texas is thriving, offering properties with vast acreage, upscale amenities, and convenient access to nearby cities. It’s clear the South is a top spot for investing in quality land

Farm Land Values

Value and Growth

The South has a rare mix of value and steady growth in land values. Recreational properties and luxury ranches tend to hold their value due to their location, water access, and natural features, making a solid choice for buyers who want long-term value.

The growing trend of outdoor recreation, remote living, and private retreats has increased the desirability of these properties. Experts predict recreational and luxury ranch values are expected to appreciate, particularly in areas with high demand like the Hill Country and proximity to Austin or Dallas[i]. While these properties hold their value, the current lending environment is worth considering.

Navigating Higher Borrowing Costs

Fluctuating interest rates have added new challenges to the rural land market. By late 2023, land loan rates for recreational and luxury properties hit around 8%, the highest in 20 years[ii]. However, many experts believe rates peaked in 2024 and could start to come down. For buyers, strategic lending options could be key to securing the right property at the right time.

This is where financing options can make all the difference, ensuring buyers can still capitalize on the opportunities the South has to offer.

Matt Manuel, a Relationship Manager at Conterra, emphasizes the importance of speed and flexibility in today’s market: “We have fast-track approval methods that provide our clients with quick turnarounds in a competitive market that requires swift decision-making,” he explains.

What sets Conterra apart, according to Manuel, is flexibility. “Multiple capital sources provide our clients with options to tailor a loan product to fit their needs. Conterra believes this to be our competitive edge in a tough rate market.” This level of speed and flexibility ensures buyers can navigate challenges and still benefit from the resilience of the Southern real estate market.

Why the South Is Still a Great Investment

Despite higher borrowing costs, interest in Southern luxury rural properties remains strong. If interest rates level out or start to drop, we could see land values in the region keep climbing. That makes now a good time to consider investing in rural properties.

Whether you’re working with luxury ranches, recreational land or pastureland, the South offers a wealth of opportunities. With the right financing partner, you can make the most of this dynamic market.

Ready to explore your options? Contact Matt Manuel today.


Data on farmland values and borrowing rates are drawn from sources including USDA NASS, Texas Real Estate Research Center, Texas ranch sales firms and market reports, the Texas Farm Bureau, Texas Farm Credit, Network Land, and industry reports.

Disclaimer: Please note that the information provided in this article is for educational and informational purposes only, and should not be construed as financial or investment advice. While we have made every effort to ensure the accuracy and reliability of the information presented, Conterra Ag Capital and its affiliates make no representation or warranty as to the completeness, correctness, timeliness, suitability, or validity of any information contained in this article. You should always consult a qualified financial advisor, tax professional, or other qualified professional for advice on your specific financial situation.

 

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