This is part two of a multi-art series on the Fredericksburg Chamber of Commerce’s annual State of the Burg economic summit that was held on May 13. This week’s installment will first look at statewide statistics and then zoom into regional housing data.
At this year’s State of the Burg summit, research economist Dr. Lynn Krebs brought life to data collected by the Texas Real Estate Research Center. He spoke on statewide population and job growth and their effects on rural land ownership. Near the close of his presentation, Krebs discussed how these broad economic shifts apply in Gillespie County’s housing and land markets.
Statewide Statistics
Hundreds of thousands of new residents poured into Texas between 2020 and 2024, with growth slowing to just below 400,000 new residents last year. Most of the growth landed in Dallas- Fort Worth (DFW), Houston, Austin and San Antonio, but notably, rural Texas saw population growth too. Dr. Krebs said that this step away from the historic norm may be due to retirement and a post-pandemic shift to remote work.
Payroll employment grew in the past six years. Since 2020, 467,000 new jobs have cropped up in the DFW area alone, representing 35% of all payroll growth statewide. Houston added roughly 270,000 new jobs while Austin added around 220,000.
Texas total personal income has increased at a remarkable rate during this time period as well, Krebs said. Total personal income is calculated by combining reported income for everyone in the state–employee wages, business income, investments, etcetera. This aggregate figure spiked in 2020 and has grown at roughly a 5% annual rate ever since. Having tested his model on different scenarios, Krebs said that TRERC expects Texas to run a 5 to 5.5% year-over-year growth rate “for the foreseeable future.” Krebs said that the growth rate is “the number one influencer” TRERC uses to predict trends in rural land prices and sales activity.
Between 2020 and 2023, the median price per acre of rural land surged upwards by 50.2%. Krebs said that this “has never been seen before.” In 2021, rural land boomed both in price and sale. The year after, the Federal Reserve raised interest rates to pull the country out of the COVID economy and sales stalled. Despite this, prices refused to yield. Price-per-acre hit its lowest growth rate in the final months of 2024 and Krebs said his model predicted that prices would fully stagnate by the first months of 2025. They rebounded instead. By the end of 2025, rural land prices had grown 6.5% year-over-year. The first quarter of this year shows an additional 6.06% year-over-year increase. Krebs said his models have continually predicted a market correction but it has yet to come. The state currently averages a price of $5,246 per acre of rural land.
“So just a tremendously resilient market,” Krebs said. He credited the price rebound to Texas’ total personal income growth, increased activity in the oil and gas sectors and increased investment in data centers.
Sales rates have shown less resilience. Krebs said the first quarters of this year show sales rates that are “massively below” those of the buying-frenzied period of 2021. However, the current rates are still well above the lows of the years following the 2008 financial crisis.
Rural land sales statewide did increase this year compared to last. But curiously, the overall amount of acreage sold fell by 8%. It appears a new trend has cropped up in rural land markets: small tracts.
Small tract sales used to represent 20% of all rural land sales in Texas. Today that figure has tripled. Krebs pointed to two reasons. For one, land fragmentation: as time goes on, large swaths of rural land are passed down from one owner to multiple inheritors. He said the other driving force may be an overall cultural shift towards land ownership, regardless of size.
“There’s been a lot more participation among Texans wanting to own a piece of dirt, if you will,” Krebs said.
Regional Housing Data
Honing in on the central Texas region, a slightly different statistical story appears. For one, acreage is more expensive, with an average of $8,028 per acre, which is an 8.27% growth from last year. Tract sizes have shrunk just around 3% this year, a slight reduction in comparison to the 24.41% average tract size decrease seen statewide. The current regional market is touting tracts that are similarly sized to years past but have risen in price. This year has seen a rise in buyers.
In the immediate area, prices have dropped. Gillespie County saw a 14.8% decrease in price-per-acre last year. Though Krebs said, “this is not what you want to see,” he also described the sharp decline in price as a market correction. 2024 saw a “pretty big” jump upwards in price and last year’s decline adjusted prices back to where they were in 2023. Accordingly, sales rates went up in the county as prices fell. Still, Krebs noted that prices are nearly 60% higher than they were before the pandemic and current sales rates have yet to return to where they were in those years.
“It’s priced a lot of people out,” Krebs said.
Next, Krebs discussed Gillespie County in relation to its neighboring counties: Bandera, Llano, and Kerr. Ranking second in population, Gillespie County houses 26,725 residents–half that of Kerr County. This area leads in median household income at $76,162 and has a 71% rate of home ownership. Gillespie County ranks second in median home price at $510,000. Homes sit for an average of 178 days before selling.
