2023 Land Market Recap
As we approached the 2023 holiday season, my partner Steve Arffa and I deplored that the year had been relatively mediocre for land sales. We spent more time than usual spinning our wheels and not being very productive. It felt like a one-step-forward and two-step-back kind of year.
After a couple of strong prior years, 2023 was characterized by many buyers sitting on the fence, an unusual number of deals falling out of escrow, and sellers wanting to price properties above the market. Of course, this is somewhat subjective, as we still had an overall production of $8,224,670 in closed transactions in 2023. But for our team, that wasn’t good enough and left us concerned.
Changes in the 2024 Land Market
The market changed dramatically once the new year began. Almost immediately, and to this day, our phones began ringing, our listings were shown more, our listing inventory shot up, buyers reached out and wrote offers, and deals closed.
During the first four months of 2023, our total sales volume was $1,552,700 compared to the same period this year of $3,168,000, a pretty incredible 204% increase year over year. Additionally, we currently have eight land parcels in escrow with scheduled closings now through July 10, 2024, with a value of $3,996,500. If all transactions hold, the Buy Tucson Lots team will have closed $7,166,651 or roughly 87% of last year’s production in the first 7 ½ months of this year. Obviously, our mood and outlook are much brighter. We’re helping more buyers and sellers, walking more beautiful parcels, loving what we do, and developing ongoing relationships with clients nationwide.
Sales Trends Around Tucson in 2024
The 2024 sales trend is not limited to a specific type of lot or a particular area of Tucson. It’s a widespread phenomenon. We’ve sold three lots in the Vail subdivision of Mountain View Ranch, a neighborhood of 1 acre with fully improved sites. Two lots in the Ocotillo Preserve Subdivision, another Vail subdivision of 4.1 acre parcels. Four lots are in the Oro Valley subdivisions of Honey Bee Ridge, Monte Del Oro, La Reserve, and Ponticello. Lots in the Catalina Foothills Estates, Foothills II, and Ventana’s Mountain Estates. Subdivisions and unsubdivided land on Rhyolite Loop in the Tucson Mountain Area and Larkspur Road in the Tanque Verde Valley. We even sold an 8 ½ acre parcel on Valencia Rd. on the southwest side of Tucson, a traditionally slower area for custom home sites.
What Has Changed Since 2023?
Though pleased and enthusiastic about the current state of Tucson’s land market, the puzzling question remains—what accounts for this sudden shift? Interest rates, which one would think to be the most important market predictor, have certainly not lowered, and in fact, they have trended slightly higher since the 4th quarter of 2023. There hasn’t been a new influx of companies producing new jobs in Tucson. Globally, we’re still in a difficult position with two active, ongoing wars. Nationally, we’re amid a presidential election year, which typically causes people to hold off on real estate decisions and stay on the sidelines.
National Effects on the Tucson Land Market
There are several factors that I believe are responsible for this positive market reversal. On a macro level, the U.S. job market is strong, and people are starting to feel more positive about this post-pandemic economy. They’re also responding to some pent-up demand from the previous several years to improve their housing situation. Adding to this is the strength of the stock market, which has created more wealth for those invested and provided some security regarding people’s futures. Finally, most young and older professionals can now perform their jobs from any location in the country and are no longer tied to working in an office.
Local Changes that Have Affected the Land Market
On a local level, Tucson continues to develop the attributes many people hold in high esteem when making lifestyle choices. We score very high in comparing Tucson to other Western and Southwestern cities. We have a wonderful climate conducive to year-round recreation. We’ve developed a nationwide reputation as a foodie destination. We’re small enough to feel easy and comfortable yet large enough to offer the excellent resources enjoyed by large city dwellers. We have a major university that provides learning and cultural opportunities to many and, of course, many sporting events not available in smaller communities.
The wonderful, close-by, and varied recreational opportunities also can’t be overlooked: hiking, mountain biking, horseback riding, and walking in our Federal and State Lands that fully surround Tucson. The lack of housing inventory in the $750,000–$1,300,000 price range also leads prospective home buyers toward custom lot purchases and building a new home.
Looking forward to the rest of 2024 and beyond into 2025, we see a continuing trend toward strong land sales for the above reasons. We expect Tucson’s intrinsic strengths as a place to live, work, raise a family, or retire will be the major driver of ongoing real estate market strength, particularly for vacant land and custom home sites.
If you need help navigating the terrain of land ownership, particularly in the Tucson area, please email me at rick@buytucsonlots.com or call me at 520.918.5477.
