Over the past two years, land activity, sales, and prices increased across metropolitan Tucson while the inventory of available lots kept shrinking. Sellers were anxiously putting lots on the market, trying to take advantage of these boom conditions. Buyers were placed in an uncomfortable position of making quick decisions, paying cash rather than financing purchases whenever possible, shortening due diligence periods, and buying with few, if any, contract contingencies. Even with these constraints, buyers could expect to pay full price( or nearly full price and have one or more competing offers to contend with.
The most difficult and previously less desirable lots that had been languishing on the market were suddenly targeted and purchased. Even home sites that offered sloped had difficult building pads, telephone poles in important view sheds, marginal dirt road access, were on busy roads, had unsightly neighboring parcels, or were in secondary locations, and seemed to sell during this period.
These market conditions were well known to agents selling residential real estate, but to us in land and lot sales, they were unusual and not the norm. The land market had shifted from a neutral or buyer-favored market to a clear seller’s market. It was similar to the land market of 2005-2007 when nearly everything sold at quickly appreciating prices.
Approximately six months ago, a change started to occur. The Fed began raising interest rates in March 2022. They repeated this in May (and again in recent months), and by June 1, 2022, it was apparent that a change was in motion. Buyer inquiries and showings on our current land listings were fewer and less frequent. The number of daily website visits searching for the vacant property were down. Sellers began to call, looking for advice and counsel on how to proceed. Only the most motivated buyers and those with available cash continued to pursue the purchasing process. Talk of inflation coupled with losses in the stock market were impacting Tucson’s land market, and we saw the transition from a Sellers to a Buyers Market.
What To Expect in a Buyer’s Market Price Range
We expect this trend to continue for a while, so as a result, we have made adjustments in our strategies for counseling and are working with buyers and sellers. Vacant land and lots priced above $150,000 are particular targets where buyers can be more aggressive in their offers.Especially for parcels that have remained on the market for 4-6 months. Properties priced under $150,000 are still affordable for many buyers, and sellers are reluctant to accept aggressive offers. I consider a Buyer’s Market to be held in this particular price range.
Our three most recent land sales are perfect examples of the current market trend. One recent sale was a 6-acre parcel in the northwest that was listed for over $280,000 and went into escrow at approximately $60,000 under the asking price. The second was a foothills lot that had been on the market for over a year, listed in the $200,000 range, and sold for $170,000. The third was an extensive view, foothills lot in a gated community with current neighboring home prices well over $1 Million. This parcel remained on the market for over a year and will close this week for $375,000.
Now, of course, each land transaction is different and is dependent upon the motivation level of both the buyer and seller, among other factors. Still, the market trend has shifted in the buyer’s favor and presents opportunities to purchase vacant land and lots in Tucson that weren’t available a few months ago.
I’m Rick Sack, and I can help you with your land lots needs. Contact me today!
