Texas land markets thrived in the first six months of 2018, posting a 6.1 percent price increase over prices in 2017. At $2,731 per acre the statewide price reflected sustained growth in most regions supported by rising oil prices and remarkable growth in economic activity. Northeast Texas and far west Texas posted very strong increases. Central Texas and the Hill Country reversed a trend toward weakening prices, posting an increase over 2017 levels. However, the Panhandle and South Plains, dominated by cropland markets saw prices significantly decline. Continuing dismal prices for farm commodities appears to be taking a toll on these areas after all.
The first half of 2018 presided over surprising economic developments. Oil prices strengthened and rose. Jobless rates declined and employment surged as tax reforms prompted new activity. These developments injected energy into land markets. As the year moves on nothing has emerged to derail the rosy outlook. However, the gathering clouds of an approaching trade war threaten to negatively impact future conditions. Currently, uncertainty about fallout from that source has not derailed an optimistic outlook for most land markets in Texas. However, weakness in cropland prices may just be beginning.