Investors wage land rush in west Texas

September 25, 2005|By Los Angeles Times

VALENTINE, TEXAS — VALENTINE, TEXAS--For 19 miles, most of it bumpy enough to shake your bones, Route 2017 runs down to the Rio Grande and the Mexican border.

Drug smugglers and illegal immigrants pass through here. So do the Border Patrol agents that pursue them, and cowboys heading to a nearby ranch. The land is sandy and bleak, full of gullies and rattlesnakes.

Yet this parched ground is increasing in value faster than any Manhattan duplex or Malibu villa.

In February, a California entrepreneur bought 7,408 acres for $65 an acre. He promptly sold them in small chunks to some people and in big chunks to others. Some of these buyers quickly resold to others, who resold to still others.

Buyers are paying as much as $800 an acre, 12 times the cost six months ago.

At the county clerk's office in Fort Davis, the county seat, they long ago lost track of how many new landowners Valentine has. They definitely dwarf the hamlet's population of 217.

There are thousands of other new owners all over sparsely populated west Texas. Nearly all the sales are for raw, undeveloped land, bought over the Internet or at seminars in distant cities.

Most of the buyers are from California, Florida, New York and other places where the cost of homes has been surging. People on the coasts, who have to spend a fortune for somewhere to live, are spending more for somewhere they can't.

After four years of real estate mania, the message has sunk in widely and deeply. Land is good. More land is better. Land will always increase in value. Every moment you don't buy, you're losing money. No need to see it before buying.

The most aggressive Internet auctioneers post a picture of land as lush as Ireland and then warn on the photo that it has no relation to what's up for bid.

Why buyers are unfazed by such caveats is a topic of considerable debate and amusement here in Jeff Davis County. One theory is that the buyers are looking for a greater fool to purchase the land from them before the bubble bursts.

The most worrisome prospect: The buyers think someone's going to live here, despite the absence of water, electricity, sewers, roads and other amenities.

"You could live there in a tent, if you could find your land," said Jeff Davis County Clerk Sue Blackley.

None of the area residents seems to think that the land is a good investment, no matter how rapidly it has been appreciating. Sure, it was smart 20 years ago to buy desert land near such boomtowns as Phoenix or Tucson, Ariz.

The fact that this land is being sold off piecemeal probably guarantees that it will never have electric power or streets. Developers want to work with large tracts they control, not hundreds of small plots whose owners are unlikely to agree on what improvements they will pay for.

Developers also like to build within sight of growing cities. Valentine, however, is a long way from anywhere. El Paso is 160 miles west, San Antonio 450 miles east. Those are tough commutes, even in Texas.

Services might be installed on an individual basis if the land were so stunning that people wanted to live on it. But the folks here say there's little chance of that, because the land is so ugly. They, unlike nearly all the Internet buyers, have seen it.

The mesquite trees are so stunted that they're the size of bushes. There are no landmarks, so the view extends for miles, curling up into the Sierra Vieja Mountains, but the Rio Grande, a big selling point in the Internet ads, is hidden away behind a hill. The sun bleaches everything into an amber hue. There's no reason to linger.

Valentine peaked as a metropolis 70 years ago, when there were three times as many people as today. The ranching community's heyday as a commercial center was even earlier, in 1890, when it boasted two saloons, a meat market, a hotel and a store.

"Not much to do here now but drink beer," said Robert Murry, who left a job with the circus six months ago to help his mother open a grocery store on California Street, Valentine's main drag.

If the town's fortunes have ebbed, its ability to inspire hype is eternal. Thirty years ago, a California developer bought a large tract, dubbed it Green Valley Acres, and started selling plots. Old-timers here say the company was rebuked by federal regulators for making false promises, including a golf course that didn't exist. The company went bust.

One of the few traces of the industrial world on the lower reaches of Route 2017 is a rusty sign bearing a real estate broker's name and number. The sign has blown to the ground, and the number is disconnected.

The Green Valley land reverted to the county, which gave it to the Valentine Independent School District. The land was for sale for a decade, but no one wanted to pay enough to make it worth the school system's while. It was leased for grazing for $5,000 a year.

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