State of the Market
The Vacant Land Market in Tucson has been more unpredictable over the last two years than we would have expected. As an example, the first few months of 2024 was a time of unusually high activity during which we received many inquiries from buyers, and sales, consequently, were strong. That was in direct contrast to much of 2023 where prices, buyer interest, and sales all seemed to lag. In May 2024, the market clearly slowed down and remained that way through the summer. Prospective buyers occasionally looked at property but very few pulled the trigger to purchase. Prices were soft and the sellers that were willing to aggressively reduce their asking price successfully sold their parcels.
Currently, land prices remain flat but fortunately showings, inquiries, and sales have begun to increase. An influx of West Coast buyers from the Pacific states, as well as those from Minnesota, Michigan, and Illinois are fueling this trend. Prices are reasonable and astute—serious shoppers can find some good values. For example, last week we helped a couple buy a 5-acre, flat, view parcel with a well share and electric at the property in the Corona De Tucson area for $89,500. The sales that are happening are on parcels owned by realistic owners who have not overpriced their land or lot.
Some examples of currently available properties that are well priced are:
- a gated, 2-acre lot in the Las Nubles subdivision on the Westside for $189,000;
- a flat, easy build Honey Bee Ridge Estates lot in Oro Valley for $185,000;
- a ridgetop, big view foothills lot in the gated Quail Canyon for $339,000; and
- a beautifully vegetated lot in Tres Lomas North on Tucson’s Northeast side for $225,000.
These are among the lots around Tucson that I expect will sell shortly.
Lot and Land Lending
There are fewer lenders than in past years that are specializing in both Lot and Construction Loan lending in our market. Most of these have programs that reduce fees for a combination of the two type of loans. For a lot loan, the typical minimum down payment will be 20% but may go up based on acreage, available utilities, access, etc. The current lenders I can recommend are:
- National Bank of Arizona – Chris Wilkes | 520-584 4143;
- US Bank – Luis Varela | 520-870-1750; and
- WaFd Bank – Dana Michalowski | 520-575-6868.
Just a note that there’s a definite advantage in buying the land for your custom home before you’re ready to build. As an example, if you buy a parcel for $200,000 in 2024 and decide to build in 2026, you will take advantage of the appreciated, 2026 value of your land when applying for your construction loan. If the land is worth $250,000 in 2026, that additional equity will be applied to the construction loan formula and may fulfill your cash requirement, depending upon loan size.
Wells
We’ve seen more buyers seeking out and preferring vacant land that is not on a municipal water system and that is served by a private well, shared well, or even requires a new well to be drilled. Obviously the latter must go hand-in-hand with a price tag that makes sense and takes into consideration the cost of a new well and equipment. This trend is not surprising with the increasing cost of water charged by water companies. Water usage can go up significantly and thus be particularly costly if a buyer has horses, other animals, is growing vegetables, or has lots of plantings. There are many residential well drillers in the Tucson metropolitan area. Three that have been serving our community for a long time and that I have personal knowledge of clients who have successfully used them are:
- BJ Drilling | 520-586-3282;
- Nelson Drilling | 520 682-8592; and
- Reliant Well Drilling and Pump Corp. | 520-293-9778.
All of these companies can also perform flow tests and water quality tests on existing wells.
Vail, AZ
We’re often asked where growth in the new home market is trending. The answer is to the Southeast in Vail, AZ. The close-in Vail location near Camino Loma Alta and Old Spanish Trail has become extremely popular as the early stages of the Rocking K Master Plan Community is being developed and marketed. Many of the major national home builders are selling homes in this location, which is close to Tucson’s amenities as well as our I-10 Freeway. Homes in various size lots with a range of prices are available. On the East end of Vail by I-10 and Sonoita Highway, Mountain View Ranch is an area being developed with affordable one-acre, custom home sites. With highway access, it’s a convenient location to the airport, downtown and the University of Arizona employment areas. Additionally, buyers can find rural land throughout this area, much of which has existing infrastructure and some or all utilities.
