CENTRAL TEXAS — Waco home prices were sent soaring this year but the housing boom has overlapped into the land, and right now, there's not enough to meet the demand.
Buyers who want to start from scratch are looking at land for building their new home.
Acres are being gobbled up along the city limits of Waco, pushing the boundaries of where development can occur.
"We're running out of land right on the outskirts," said Coldwell Banker Apex realtor Pam Hanson. "So we're having to get into a little bit more undeveloped, rural areas."
Hanson says the skyrocketing prices for land are primarily driven by a lack of supply, but she also notes that the cost to extend water service to rural lots is driving up the price.
According to a Texas A&M report, land prices during the third quarter this year were, on average, 30 percent higher per acre than the third quarter in 2020. That equates to an average price per acre of $5,290. But that hasn't stopped potential buyers.
"So I see a lot of people from the big cities calling me that literally want to do homesteading projects and are wanting just a couple of acres to do that," said Hanson.
The high demand is a result of more than just than a newfound novelty in homeownership. Economists like Rob Tennant, assistant professor of accounting at Texas A&M - Central Texas, point to the arrival of industry and technology jobs as an attraction to the area.
"You start pulling people from the community to look for houses to move closer in, but also you draw people from all over the country to a region they have not lived before," said Tennant.
Farmers have had to find ways to cope with these trends. Some of the leased land they use for farming has been sold off because the owners can't resist the high asking prices. It has led some farmers to sell their own land just to cut a paycheck.
"I see some farmers losing land because their landlords are selling it, and cutting it up and subdividing," said Hanson. "Because it's worth more per acre in smaller tracts than it is large acreage."
The land is expected to still be a hot commodity going into the winter. For people who are looking to buy before prices get any higher, Tennant has a word of advice.
"If you're planning on buying and you have the ability to buy it now, make sure it's the right property for your needs because even if you get a good value on it, it's not a good value if it doesn't serve your purpose," said Tennant.
Realtors expect the ballooning prices to settle down a little over the next few months, but a true plateau may not occur until 2023.