Market Pulse - Central Texas Ranch Market Q3 2024

The saying "The dog days of summer" perfectly describes the third quarter in central Texas, which was hot and unusually humid. Showing requests seemed stagnant, and when we compared the data to the second quarter, our feelings seemed justified. The question is, did our expectations of an upward-trending market magnify the feelings of the traditionally slower third quarter, or was it truly as stagnant as it felt?

The statistics for the third quarter are not as impressive as those for the second quarter, which was stronger than we had realized. However, when comparing the third quarter of 2023, the transaction volume in the eastern market was up 14%, and the transaction volume in the western market was the same as in the third quarter of 2023. So, now that we see that the third quarter was not a complete failure, what can we learn from it?

The main point to take away is the consistent pattern this year emphasizing the significance of pricing. The data across the board continue to confirm that when a property is priced correctly, it tends to sell relatively quickly, and the difference between the list price and the actual sale price is favorable. In the Western region, the average time properties spent on the market before selling was 82 days for Q3 sales, with an average difference of 11.7% between the sale and list prices. In the Eastern region, the average time on the market was 110 days, with an average difference of 10.11% between the sale and list prices.

For the remaining properties currently listed, the average time on the market is increasing, reaching averages of 219 days in the West and 224 days in the East. These higher averages do not concern me, as historically it takes 12-18 months to sell a ranch in Texas. However, it is interesting to note whether the quicker sales with favorable deltas are due to perfect timing - the right buyer, the right location, and the right price - or if buyers are extremely price-sensitive. Due to the recurring nature of this pattern, I believe it is the latter.

The interesting trend that hasn't shown up in the data yet is the increase in listing interviews during Q3. I believe that new inventory will start to appear in the market this quarter. Many sellers have mentioned that they would like to wait for the election results before listing their properties. Historically, the election has not affected our market, but I believe the divisiveness of this election is causing people to hesitate. I think that as we get more clarity, we will see an increase in inventory numbers, regardless of the outcome.

I am still optimistic that the fourth quarter could be one of the strongest ones of the year. Starting around mid-September, showing requests have begun to pick up. I have also started to see it in the contract pending data, with 14 ranches going under contract in central Texas in late September, which is a large spike from July, when only 3 went under contract. In September 2023, we saw 12 contracts pending, and in October of 2023, an additional 21. Hopefully, that fall ranch sales trend holds true for 2024. The question is, will the anticipation of the election delay the trends, causing what would typically close in November/December to carry over into the New Year?

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Interested in selling or buying? Reach me at 281-682-8638 or [email protected]