You can never say for sure which way it will go. Or how fast.
When people ask me for valuation help, or are thinking about selling, one of the things they often want to know is how much the property is going to be worth in the future.
My answer is always the same. I don’t know, and neither does anyone else.
Now historically, land and lot values around here have generally gone up over time. As long as North Texas keeps growing, people keep moving here, and the economy stays relatively strong, there’s a decent chance that continues over the long run.
But there’s no way to know how fast.
Or whether it goes up at all over any particular stretch of time.
Sometimes things go sideways on you.
Back in the late 1980s and early 1990s, land values ran up very quickly during the savings and loan era. A few years later, some of those same properties sold out of receivership for less than the commission paid on the earlier sale.
A few years before that, acreage in southwest Sherman was trading around $20,000 to $25,000 per acre because people thought a GM plant was coming.
The plant ended up going to Tennessee.
I worked on a deal in that same area years later at exactly $6,500 per acre.
Then there were the lot markets around 2006 to 2008.
I saw subdivision custom home lots in Collin County selling for over $75,000 during that runup. A few years later after the financial crisis, some of those same lots were changing hands around $20,000.
In 2020, many people thought the lot market was going to freeze up completely.
Instead, it got hotter than anything I’ve personally ever seen. In some areas values doubled between roughly 2020 and 2023.
Since then? Not so much.
Here are the prices on a lot I have seen trade three separate times:
October 2023 — $310,000
May 2024 — $330,000
May 2026 — $315,000
Pretty flat.
That doesn’t mean the market is collapsing. And it doesn’t mean land is bad.
It just means markets move in cycles, and people have a tendency to mistake temporary conditions for permanent ones.
So what’s the takeaway?
A couple things.
First, you’re usually better off making decisions based on what makes sense today rather than based on what you paid, what you hope happens, or what somebody confidently predicts the property will be worth years from now.
Second, if somebody tells you with certainty what your property is going to be worth in the future, they’re probably giving you more certainty than the market actually allows.
That’s not how this works.
Even if you’re not planning to sell, there’s still value in understanding where things actually stand today.
You don’t have to do anything with the information.
But things change. Sometimes slowly, sometimes fast.
And it’s usually better to already know what you’re dealing with instead of trying to figure it out under pressure later on.
PS- Even if you’re not considering selling today, is it a bad idea to have a handle on what you’ve got?
That’s where the MBR Land Reality Check comes in.
It’s a free, no obligation look at what your property might sell for today, based on what buyers are actually doing today. Real comps with real prices.
You don’t have to sell, but you should at least allow yourself to look.
PPS- If you’re not ready for a Reality Check but would like to follow along, enter your info below to get these in your inbox.
