Prices Are Holding. Volume Is Not.
The Texas land market is in a standoff. Statewide nominal prices have plateaued near record levels, but the number of acres trading hands has dropped materially. According to the Texas Real Estate Research Center at Texas A&M, total acres sold fell 12.57 percent year-over-year in Q2 2026, and total dollar volume contracted 9.72 percent — even as the statewide median price per acre remained essentially flat at $5,218.
That divergence matters. It tells you the market has not broken. Sellers have not capitulated. But buyers have pulled back. The result is a market where overpriced or poorly positioned land sits, while correctly priced, execution-ready land still trades.
If you are a landowner evaluating a disposition, or a builder looking for acquisitions before year-end, that gap is the most important thing to understand right now.
What Is Actually Moving — and Where
Not all Texas land is experiencing the same conditions. The spread between markets has widened considerably in 2026.
- North Texas / DFW: Development-stage land is commanding the highest average pricing in the state — roughly $8,500 per acre on average, reflecting proximity to the DFW metroplex and its infrastructure base. Urban infill and transit-adjacent development along the DART network have grown relative to prior suburban cycles. The lot pipeline, however, has expanded: DFW is projected to surpass a 40-month lot supply by year-end 2026. That supply overhang is putting pressure on builder demand for raw land.
- Austin–San Antonio Corridor (I-35): The strongest pricing activity in the state remains concentrated here. Land near highway expansions, utility extensions, and subdivision-ready zoning continues to outperform the statewide average. Retail-ready tracts in this corridor are approaching or exceeding $38,000 per acre. The Austin-Waco-Hill Country region posted a median of $8,040 per acre in Q2 2026, up 8.63 percent year-over-year — the largest dollar volume of any Texas region.
- San Antonio metro periphery: San Antonio remains a lower-volatility market with continued community development on the metro's growth edges. Builders here are still active, but affordability pressure has made them more selective on both product type and land basis.
- Houston: Total residential construction value is running near $660 million as of early 2026. Harris County is the most active county in the state for new residential permits. But builders are dealing with margin compression from elevated concrete costs and labor constraints, making land basis discipline non-negotiable.
The Entitlement and Infrastructure Risk Is Getting Priced In
Here is the shift that is most consequential for landowners who have not been paying close attention: institutional buyers are underwriting entitlement and infrastructure risk more aggressively than at any point in the last five years.
TCEQ discharge permits now take 24 to 36 months in Texas. For most development projects, carrying costs run $50,000 to $200,000 per month in financing, holding costs, and lost lease revenue. That means a standard discharge permit process alone can add $1.2 million to $7.2 million in unplanned cost exposure to a project before construction starts.
Impact fees are rising. Texas municipalities have been increasing their authority to impose one-time charges on new development to fund roads, water mains, and wastewater infrastructure. These fees increase the cost of homeownership and directly compress developer margins — which translates directly into lower land bids.
Land without utilities, without a clear entitlement path, or without a confirmed infrastructure timeline is being discounted steeply. Land with those items in place is still commanding competitive pricing. The spread between the two is wider now than it was in 2023 or 2024.
That means a landowner's positioning on utilities, entitlements, and execution timeline is now a primary price driver — not a secondary one.
Capital Is Still in the Market. It Is Just More Selective.
Texas remains one of the deepest commercial real estate capital allocation geographies in the country. But the 2026 edge is selection, not blanket growth. Institutional capital — including Texas pension systems with 15 percent real estate target allocations — is still deploying. The Teacher Retirement System of Texas, a $234 billion fund, allocated over $334 million across private equity and infrastructure managers in July alone.
Private equity dry powder nationally reached $1.13 trillion at mid-2026. Capital exists. The barrier is not availability — it is fit. Buyers at the institutional level are separating four questions before engaging on a site: Does it have scale and exit liquidity? Does it have infrastructure-backed downside support? Is the entitlement timeline executable? Is the pricing realistic relative to the development pro forma?
Family offices and private capital are filling some of the gap where institutional lenders will not engage — particularly on raw or pre-entitled land where there is no confirmed utility capacity or development timeline. But even that capital is applying more rigorous underwriting than it did two years ago.
What Sellers Are Getting Wrong Right Now
The most common mistake landowners are making in this market is anchoring to 2022 or 2023 comparables. Those transactions occurred in a different rate environment, a different builder demand environment, and a different infrastructure cost environment. Using them as a pricing baseline today produces unrealistic expectations and extended hold periods.
The second mistake is presenting land without a utilities and entitlement narrative. Builders and institutional buyers are doing their own infrastructure cost modeling before they make an offer. If a seller cannot provide clarity on water, wastewater, road access, and entitlement status, the buyer assumes the worst case — and prices accordingly.
The third mistake is treating all buyer pools as equivalent. A regional builder underwriting a 150-lot subdivision has a different cost structure and return threshold than a family office holding for long-term appreciation or an institutional developer building a master-planned community. Positioning a site to the right buyer type is as important as pricing it correctly.
What Builders Are Getting Wrong Right Now
Builders chasing price discounts on raw, unentitled land are often underestimating the total cost of site development. The statewide average for development-stage vacant land is approximately $10,200 per acre — but that figure does not include permitting timelines, infrastructure agreements, or carrying costs during the entitlement period. A site that looks cheap on paper can be expensive in practice once the full timeline is modeled.
Properties within 30 miles of major interstate interchanges appreciate 22 percent faster than comparable rural properties — the access premium on the I-35 corridor between San Antonio and Dallas is particularly pronounced. Builders who are buying based on current price rather than infrastructure-proximity trajectory are leaving basis risk on the table.
The Market Standoff Resolves One Transaction at a Time
Volume will not recover because conditions improve broadly. It will recover because individual sellers and buyers arrive at realistic mutual ground on specific sites. That process requires accurate, builder-standard land valuation — not broker opinions anchored to outdated comps, and not asking prices built on hope.
The sellers who transact in the next two quarters will be the ones who understood what their land is actually worth to the buyer sitting across from them: a builder or institutional operator who needs to model utilities, entitlements, execution timelines, and a realistic land basis before they can write a check.
If you want a confidential Land Value Opinion or want to discuss positioning your property for institutional buyers, PLG evaluates land the way builders do — utilities, entitlements, execution timeline, and realistic pricing before we ever discuss terms. Submit your property details at powerlandgroup.com.