Homes on the range: Luxury ranch sales are booming
Wealthy buyers head to Montana, Wyoming and Texas for acres of real estate without the cattle wrangling
By 9:30 a.m. on a recent Saturday, Paul Johnson had already caught six brown trout on his sprawling property about 40 miles southwest of Billings, Montana.
An anesthesiologist from Southern California, Johnson and his wife Roberta bought the 879-acre spread in December. Called Sanctuary Ranch, it includes a 12,500-square-foot mansion — along with three guest houses — an 1,800-square-foot pool house, a 1.5-mile private spring-fed trout stream, nine stocked ponds and views of the Beartooth Mountains. The spot in Carbon County had most recently been on the market for $6.9 million after first listing for $8 million; Johnson declined to reveal the purchase price.
The couple had been looking to buy a ranch for years, and closed on the sale while California was in the middle of another Covid spike.
While many wealthy buyers across the U.S. picked up suburban and country homes to escape pandemic restrictions and double their space, others like the Johnsons cast their gazes farther. They turned to properties where the buffalo once roamed, and which are best measured in acres not square feet.
“Prices were getting higher and higher,” Johnson said, explaining his decision to buy. “It wasn’t us fleeing directly, but we felt the pressure of a lot of people fleeing the urban and suburban markets, and going to more rural communities.”
In addition to Montana, other Western states where demand for luxury ranch properties has spiked include Wyoming, Colorado, Texas and California, said Mike Duffy, president of Kansas City, Missouri-based United Country Real Estate. Last year, the agency’s luxury ranch division sold more properties than it ever had, and nearly doubled its 2019 total, he said. And in the first four months of this year, ranch closings are up 10 percent compared to the last four months of last year, Duffy said.
Ranching not wrangling
But while pandemic buyers are looking for a taste of the great outdoors they aren’t looking to operate a working ranch, said Ken Mirr, whose Denver-based Mirr Ranch Group focuses on properties in the Mountain West region. They want the ranch without the wrangling and generally don’t want complete solitude, preferring to settle near town, Mirr said. Some choose property within an hour of resort spots that are themselves attractions like Aspen, Colorado; Jackson Hole, Wyoming; and Sun Valley, Idaho.
Some buyers do enter into leases with traditional ranchers who run cattle — allowing them to maintain agricultural land tax breaks and collect some revenue.
The hot market has been a boon, too, for some big-name sellers with ultra high-end properties. In May, Tom Cruise sold his 320-acre ranch in Telluride, Colorado, for $40 million. That was the same amount he listed it for two months earlier, though far below its original $59 million asking in 2014.
And in January, fashion designer Tom Ford found a buyer for his 20,000-acre Cerro Pelon ranch near Santa Fe, New Mexico, which listed for $48 million. It had hit the market for $75 million in 2016.
Stratospheric sales aside, brokers say the real sweet spot has been ranch properties that sell for a few million dollars and have hundreds to a few thousand acres.
United Country, whose properties average about 5,000 acres each, classifies the luxury category as $1 million and up; it claims to sell more ranches in the U.S. at that price range than any other brokerage. Average closing price for ranches under the United Country umbrella was $3.6 million last year, Duffy said.
Sanctuary Ranch’s listing broker Jim Taylor, a principal at Hall and Hall, said the firm had its best year of sales ever in 2020, “by orders of magnitude.”
“Everybody was at home on the internet looking at ranch porn,” he said, referring to the pandemic lockdowns.
Rising sales, falling inventory
Taylor added this year is shaping up to be even stronger for the Montana-based brokerage, which specializes in ranches and farm properties and has offices across the Western U.S.
As of late May, Hall and Hall’s sales volume was already two-thirds of the way to what the brokerage did for all of 2020. The ranch boom has tracked with overall demand for homes, which continues to rise nationwide, as buyers push prices higher.
But dwindling inventory has become an increasing issue, Taylor said. Hall and Hall had 102 listings at the end of May, compared to about 135 at the same time last year.
The recent shortage was inevitable, brokers said, given that out-of-state prospectors began scooping up rural properties as far back as last spring. That’s when Texas saw an influx of ranch buyers from Florida, Arizona, California and New York, said Dustin Ray, co-owner of 1836 Realty Group. Located near San Antonio and affiliated with United Country, the brokerage now has about half the inventory it did a year ago, Ray said, and demand has been the strongest in a dozen years.
As an example, he cited an $8 million ranch in San Antonio Hill Country that generated several calls from buyer agents before it hit the market in late May.
“That’s just not normal,” he said.
Among the most difficult ranch listings to unload are the ones with especially large or luxurious homes, said Todd Renfrew, owner of California Outdoor Properties.
“That is someone else’s dream,” he said.
The recent crop of ranch buyers want turn-key-ready homes for immediate move-in, Hall and Hall’s Taylor said.
“They would accept someone else’s architecture. They were willing to pay for someone else’s improvements,” he said.
That was the case for the Johnsons, who have been able to bask in Sanctuary Ranch and the two-mile natural waterway that runs through it, called Rock Creek. The couple, who still live in California, plan to do some upgrades on the new property but are in no hurry.
“We needed something that was livable and enjoyable from the day of purchase,” Paul Johnson said.