I was honored to be invited to speak about custom lot trends at the recent “Housing and Land: Market Perspective” seminar presented by The Southern Arizona Chapter of the Appraisal Institute. In preparation for my presentation, I produced a vacant land ‘Heat Map’ showing the percentage of change in land sale prices in each of Tucson’s zip codes, from 2016 to 2017. This is the second part of a 2-part series. Read part 1 here.
The area of Tucson that continues to lead the land market in both velocity of sales and price increases is Northwest Tucson. The Oro Valley area continues to be a popular destination for new homebuyers and builders as does the Dove Mountain locale.
In 2017, the NW accounted for 138 of the total 505 area wide sales – or 27.3% of all land sales in Tucson. The median sales price increased from $102,500 in 2016 in Dove Mountain, 14% and 2% respectively. Unsubdivided, 3.3-5 acre sites also saw price increases from the $110,000 range to the $125,000 range.
Although the median price of West side lots decreased 11% from $82,000 to $72,700, sales volume increased approximately 10% between 2016 and 2017. We also saw Tucson’s newest gated subdivision, Las Rocas, off El Camino Del Cerro, come to market: A gated, 20-lot neighborhood of 1.5 to 2-acre custom lots priced aggressively in the $170,000-$185,000 price range. Interestingly, excellent land values are currently available in Tucson Mountain Reserve at $135,000, Saguaro Cliffs at $127,000, and Starr Pass at $80,000-$110,000.
Despite price decreases from 2016 to 2017 in many of the areas in Tucson, every area experienced an increase in sales volume. A total of 505 custom lots were sold in 2017 versus 388 in 2016 – a whopping 30% increase annually. This trend is continuing during the first 5 months of 2018 and based on that, I predict sales of approximately 600 lots this year – a 20% increase over 2017.
We’ve begun to see land subdivisions, dormant since the recession, being re-priced and brought back to market. I expect this trend to continue into 2018, 2019, and beyond. Examples are Ocotillo Preserve, a 40-lot conservation subdivision of 4-acre sites at the base of the Santa Rita Mountains in Vail, Arizona. Originally priced in the $175,000-$250,000 range, these are now available from $110,000 with special builder terms and incentives for multiple lot purchases.
Also, The Reserve at Saguaro Park, a 15-lot SR zoned subdivision, is about to be re-introduced to the market and sold in its entirety. This recorded but unimproved subdivision of 57 acres at the west end of Ina Road is currently considered a “Paper Plat” as the new buyer will have to complete all the planned improvements including roads, gate, and utilities prior to developing homes on the site.
With many current lenders offering lot loans (One Arizona Credit Union, US Bank, National Bank of Arizona, Compass Bank, and Washington Federal among them) at what are historically low rates, new jobs being created in Tucson bringing many more professionals to our area, and a plentiful inventory of good and new lots, the Tucson Land Market is positioned for another strong period of growth.
To read Part I of my list of “hot” areas, click here.
