Those were the words that started a very interesting,  front page article by Josh Brodesky of The Arizona Daily Star on 10/25/09 describing the current market for large parcels of Development Land in and around Tucson. This is the type of property that is bought, entitled, developed and sold to national and regional companies such as Pulte, Dell Webb , A.F. Sterling, Pepper Viner and the like, to create large track home communities of what have been traditionally thought of as affordable homes. And the market, in a single word, is bleak. Very few sales (only 4 transactions in 2009 totaling $3.6 M compared to 42 in 2008 totaling $ 98.8 M ),  sales that take place for less than the cost of the improvements, tremendous supply far surpassing demand (23,000 platted, unimproved lots currently available and I am told 8,000 platted, finished,  unsold lots as well), all in a market where existing new and re-sale single family homes are abundantly available at prices lower than we’ve seen in years. Adding to this is an environment with high foreclosures, high unemployment and virtually no financing for raw land or to complete projects that developers have walked away from in the past couple of years. The article finishes on a high note, quoting the largest land developer in Arizona, Don Diamond, who points out the limited supply of good land and the inevitable absorption and cyclical nature of the market that always works in the favor of  those with patience and staying power.

In reflecting and comparing the above to  the state of the custom home land and lot market, which is my daily workplace, although clearly depressed, there is a  glimmer of hope which I can report. We are starting to see foreclosed lots  being absorbed quickly after they hit the market. Not only do these provide great opportunities for investors and people wanting to eventually build their own home, but starts “unclogging” the market of a large oversupply of buildable land.

I’ll go into the custom  home site  market more thoroughly in an upcoming blog.

This entry was posted on Monday, October 26th, 2009 at 8:00 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.