In a previous post, I shared data from the Real Estate Center at Texas A&M showing the effects of the 2008 financial crisis on ranch prices. That data indicated that the effect overall was minor, about $200 per acre or 6%, and was followed by a rebound over several years which eventually doubled prices. I suggested that the effect of the Covid pandemic would be similar, encouraging ranch buyers to seek out suitable property and negotiate the best price.
Actual reported sales during the Covid crisis seems to bear me out. From April 1, 2020 to July 1, 2020, there have been 9 ranches over 500 acres sold in the area south of San Antonio comprised of 15 counties. Average sales price was 92.4% of asking, a slight dip from the long term average of 94% of asking. Of interest, sales are down a bit from last year with 19 ranches sold from 1 Jan. of 2019 to 1 July of 2019 versus 17 ranches sold in the same time frame in 2020.
As I have also mentioned in previous posts, June has always been my strongest month; hunting season is over and those leasing want to buy while those who feel they have maxed out their management on a ranch want to trade up. Most ranches come up for sale following the deer season, so selection is good and most close in June. In June of 2019, there were 9 sales of ranches in the target area over 500 acres. This year in June, there were only 4. Reasons for that? Well, the stock market is still strong, the number of ranches on the market is down, and we have yet to see the end of the pandemic.
What is the take away? For sellers, study the comparable sales and adjust your asking accordingly if you really want to sell. For buyers, study what ranches are available, get a broker to bird dog the marketplace for you, and get in the truck to look; it doesn’t cost anything but your time and everyone is Covid-conscious now, so multiple vehicles are the norm.