This time of year I always find myself thinking about the state of Tucson’s vacant land market; where it has come and where it seems to be headed. I realized that for the first time in the last few years, I’m feeling happily optimistic going into 2017.
2016 didn’t start that way as land sales in the first quarter were exceedingly slow. From the 2nd quarter on, however, momentum has steadily built and continued through today. The trends have been noticeable and continual. I’m seeing an increase in both the sales volume and sales price of vacant land and lots across much of Metropolitan Tucson.
I’m seeing buyer’s hiring Architects and Builders to begin new custom home projects rather than purchasing vacant property to hold for future development. I’m seeing Custom Builders come back in the market after a 10-year moratorium, buying lots to build high-end speculative (spec) home projects (homes that are not built for a specific owner but rather with the expectation of a sale at some future point during the design/construction/completion phases).
I’m seeing an abundance of mortgage funding for vacant land purchases and construction loans at affordable rates with reasonable fees. And I’m elated at the recent news of Tucson’s successful job creation efforts finally paying off with thousands of new Caterpillar and Raytheon employees heading our way which is fueling this growth.
Let’s look at the Foothill’s Land Market as a microcosm for Tucson’s land trends. The Foothills area is bounded by River Rd on the south, Sabino Canyon Rd on the east, First Ave on the west, and the Catalina range on the north.
In the past 60 days, 14 vacant home sites have sold and closed ranging in price from $141,570 -$825,000. Surprisingly, 7 of these sales have occurred in the Ventana Canyon Community equaling the total number of sales there for the past several years.
Of the 7 sales which range in price from $225,000 for a 1/2 acre lot in Whaleback Ridge Estates to $825,000 for a 3.6 acre ridgetop site in Ventana Mountain Estates (the highest sales price in Ventana since 2006), at least 5 were purchased to develop immediately, 2 of which will be spec home projects. Additionally, there were 2 sales in the established, non-gated Foothill’s communities of Skyline Bel Air Estates and the Foothills at $160,000 and $200,000 respectively, which represent a marked increase in value from the previous year’s sale prices.
The Sabino Mountain area had 2 strong sales as well, at $323,750 and $325,000. A lot in Shadow Hills closed at a price of $228,000 significantly higher than the previous sale of a comparable lot in that area 2 months earlier which sold at $190,000. Rounding out the 14 sales was a Pima Canyon home site at $385,000 and a lot in Montanas Estates for $141,750.
The Tucson Land Market is starting to show positive signs heading into 2017 during which time I expect land inventories to shrink while sales velocity, volume, and prices continue to rise. The land Market has been solidly buyer favored for the past 7-10 years. This is starting to balance as the overall trajectory in the Tucson land business begins to again head up.
