Real Estate in the Roundtopolis

As the population in urban areas grows, the footprints of cities cover more land making open space just a little more scarce. As urban areas grow so do the crowds, making elbow room just a little more coveted. A finite land base and an increasing appetite for open space create an economic force to be reckoned with. We talked with many experts about real estate in the Roundtopolis for this series of articles.

Rural real estate in Texas is a hot commodity.

Austin, Bastrop, Burleson, Colorado, Fayette, Lavaca, Lee and Washington counties—the eight-county region that we’ve dubbed the Roundtopolis—represent the remaining stronghold of rural land between Houston and Austin. To put this in perspective, almost nine million people live within a 120-mile radius of Round Top, population 90.

Country properties are unique. They offer peace, quiet, security and, if recent history continues, the potential for a stellar return on investment.

With this in mind, we talked with local real estate experts: Broker-Owner Roger Chambers of Market Realty in Burton; President-CEO Cathy Cole of Heritage Texas Country Properties in Brenham; Broker-Owner Grover Hillbolt of Round Top Real Estate in Round Top; and Brokerage Co-owners Sandy Reed and Pam Langford of Sandy Reed Country Properties in Round Top to get their perspectives on the market trends shaping real estate in the Roundtopolis.

Boots, Blue Jeans and Business

The Roundtopolis is a boots and blue jeans market influenced by city rhythms.

Commuter Culture
Historically, the region has been home to weekenders, urban professionals looking for a respite from their hectic rush hour lives. Traditionally, these professionals were employed in the oil and gas sector. Now, the professionals reflect Texas’ more diverse economy and work in technology, biotechnology, biomedicine and engineering as well as business, law and medicine.

“Stop and consider just how many colleges and universities are within a two-hour drive of the Round Top region—and that’s just one small example,” Cathy Cole, Texas Heritage Realty, said.

“Stop and consider just how many colleges and universities are within a two-hour drive of the Round Top region—and that’s just one small example,” Cathy Cole, Texas Heritage Realty, said.

In recent years, the region has seen a pronounced growth in a commuter culture. The area’s central location makes it ideal.

“From the mid-1980s – 2000, our primary influence was Houston, but we’ve begun to see additional demand in different areas of the region as growth in Austin and even Bryan/College Station has begun to drive local demand,” Roger Chambers, Market Realty Inc., said. “Previously, people would come in and name a specific community where they wanted to live. Now, people come in and say, ‘We want to live within an hour-and-a-half of X-city.’”

With Austin growing east, commuters are beginning to consider property on the west end of Washington County and the north end of Fayette County as well as Bastrop and Lee counties. As Bryan-College Station grows south, commuters are purchasing land in Burleson and eastern Lee counties.

“In the 1980s, our client base was a mix of local buyers and those from outside the region,” Grover Hillbolt, Round Top Real Estate, said. “Today, a majority of our buyers come from outside the region.”

“In the 1980s, our client base was a mix of local buyers and those from outside the region,” Grover Hillbolt, Round Top Real Estate, said.

The housing market in the region is very competitive. Unlike many rural areas, the Roundtopolis has centers of commerce, manufacturing, education and health care that keep the regional economy diverse and strong. Members of the local work force and commuters often set their sights on the same housing options.

“The types of homes that people seek are as diverse as the buyers themselves,” Pam Langford, Sandy Reed Country Properties, said. “There is not a typical Round Top home, but there are plenty of people who want to call this area home.”

Investment
Many people are also looking at real estate as an investment—especially in the aftermath of the 2008 recession.

“In the past seven – eight years, we’ve seen more people investing in real estate because it is real property, and it is retaining—and gaining—value,” Sandy Reed, Sandy Reed Country Properties, said. “The crazier and more unpredictable the world gets, the more people crave a quiet, peaceful and sane existence.”

Cole, whose company has an international presence, noted that some of the investments have a foreign flavor with buyers coming from China, Canada and Russia.

“People from all over the world are seeing the advantages of investing in our region,” Cole said.

The brokers agree that there is very high demand for smaller properties ranging in size from five-acres – 50 acres. This creates an opportunity for investors.

“When you consider the pool of buyers, there are many people who can afford properties in the $200,000 – $750,000 range,” Chambers said. “There are fewer people who can afford multi-million dollar purchases, but those who can invest in large pieces of undeveloped land have the opportunity to sub-divide and potentially double, triple or quadruple their money while meeting the growing demand for smaller acreages.”

The fact is there is a finite amount of land available.

“It’s a cliché, but it’s true—they’re not making any more land,” Hillbolt said. “A growing demand means there is the potential for a growing return on investment.”

Wildlife Valuation
The brokers concur that the advent of wildlife valuation in 1995 changed the landscape of real estate in the Roundtopolis. Now, it is possible for landowners to maintain a special valuation for wildlife management that was previously reserved for agricultural production.

“Over the past 10 years, a majority of unimproved land sold was converted from agricultural valuation to wildlife valuation,” Cole said. “It’s much easier for absentee landowners to implement wildlife management than it is for them to run livestock.”

Wildlife valuation has not only changed the way people manage their land but the way the land looks. Once manicured coastal Bermuda pastures have given way to forbs, native grasses and brush thickets.

Mineral Rights
With the discovery of the Barnett and Eagle Ford shales, landowners have become even more reluctant to part with mineral rights.

“Landowners are holding on to their mineral rights because improved technology has increased the likelihood oil and gas may someday be found in unlikely places,” Hillbolt said. “At the same time, the big shale plays have raised the profile of oil and gas in buyers’ minds. They assume the mineral rights will transfer with the purchase, so it creates another point of negotiation.”

Of course, in many cases, the mineral rights have been unavailable for several generations of ownership rendering negotiations moot, he said.

Water Rights
Currently, water rights are still conveying with most properties in the Roundtopolis.

“Right now, water rights are not getting a lot of attention as land changes hands in the Round Top region,” Chambers said. “But water rights are being negotiated as part of land sales in other nearby counties.”

It comes up for discussion in Burleson and Lee counties, he said. And he has been involved in transactions in McClennan and Limestone counties where the sellers relinquished all domestic water rights but maintained 100 percent of the commercial water rights.

Round Top Magic
While their reasons for coming to the country are as varied as the people who come, there is a common thread. People want to relax and reconnect to what is important to them.

“Round Top has a certain cachet,” Reed said. “It’s becoming a widely recognized brand for living well. There’s magic in these hills—and people want to be a part.”

Also see Seller’s Advice, Buyer’s Advice