I’ve always enjoyed helping people buy and sell land. Some REALTORS hate it. I don’t know why. Sure, some land deals are a royal pain in the buttocks, but then again so are a lot of single-family home deals. And don’t even get me started on commercial transactions!
Land in and around Phoenix is going CRAZY! Here are a few true life examples:
A couple bought 40 acres near Tonopah, AZ (50ish miles west of Phoenix) about 6 years ago for around $40,000. It’s a nice parcel, mountain views, some saguaro cactus. Flat terrain with a couple of washes through it, but the majority is buildable. They got a cold call from a realtor asking if they wanted to sell it. If I remember right, this guy offered them $200,000. Fortunately they had enough sense to look into it. I priced it for them in the $370,000 range. Listed and sold it in a couple of weeks for full price. So they made $330,000 in 6 years. Not too bad. Here’s the kicker though”¦. That sale closed 6 months ago. Today 40 acre parcels in that area are going for $500,000 – $600,000. Yes, that’s a $200,000 increase in six months.
Last week I got a call from a realtor in Texas. Her mother has owned a 4+ acre tract near Whittman (Northwest of Phoenix) since 1976. She had gotten a cold call from someone offering her $25,000 for it. Land in that area is selling like hotcakes for $13,000 to $16,000 ”easily.” I’ll do the math for you. That 4 acre parcel should be listed for $55,000 – $66,000. It could be listed for even more if they aren’t concerned about selling it in a few weeks. I don’t have this listing, yet. But at least I was able to show them that selling it for $25K would be insane.
A guy in the Air Force calls me several months ago. He hasn’t lived in the Phoenix area for about 10 years. He’s getting out of the service and wants to buy a couple of acres of land to build on in the Queen Creek area (much closer to Phoenix than either Tonopah or Whittman, in the south east valley). He’s thinking he can get 2 acres for $3,000 maybe $4,000. I tell him land in Queen Creek, if you can find it, is going in the $200,000 per acre range. He thinks I’m nuts. Maybe it is nuts, but that’s the way it is. When he was here 10 years ago, Queen Creek was WAY out of town and nothing but farm land. Now it’s in town and nothing but subdivisions.
All this begs the question, “Why is land going berserk around here?” It’s actually relatively simple. It’s all supply and demand. Obviously they aren’t making any new land. Hence, supply is low. The population of the Phoenix area is exploding, hence demand is high. It is a basic law of economics folks. Low supply + high demand = increasing prices.
The savvy investor may be asking themselves, ”Where is the best place to buy this land?” The easy answer is “Anywhere you can afford it.” If you want specific places, understand this. There are tons of mountain land for sale in Montana that are worth looking at. Geographically (and I suppose politically) there are only a few directions that Phoenix can grow. There are mountains directly to the east and northeast. Geographically Phoenix can’t grow in those directions. There are Native American reservations to the north and south (roughly). Politically, Phoenix can’t grow in those directions. That leaves due west, to the northwest and to the southeast for the direction of Phoenix growth. To the west, look to Buckeye (already getting ridiculously expensive ala the previously mentioned Queen Creek) and further west toward Tonopah. To the northwest, look past Surprise to Whittmann (and beyond). To the south/southeast, the little towns of Eloy, Toltec, Arizona City and Casa Grande are beginning to take off. You can still get land and existing homes (and new builds) for a very reasonable price in the south/southeast areas. I think that area is going to be the next major boom area. There are rumors that huge developers are looking that way. A gigantic mall is scheduled for construction near Casa Grande and that earthworks have already begun. Just a year ago, no one had ever heard of Maricopa (the town, not the county) and now it’s gone bonkers in real estate appreciation. Mark my words. Barring some total economic collapse, in a couple of years, home and land values in these south/southeast cities will have appreciated remarkably.
sold 1 acre in tonopah for 37,000 dollars . i paid 2250 dollars for it in 1989 in 2006 is when i sold it.
Nice little return on your investment Steven! Wishing you bought 100 acres? 🙂
People probably laughed at you for buying land in Tonopah in 1989. Looks like you get the last laugh!
Can these prices be true? I own 40 acres on 411 th Av (North of the 10).
The property is located closer to the foothills than the freeway. Do you think the land value will be more being closer to the
foothills? The land was about 700/acre when I bought.
Bobby – Of course those prices are true! Amazing but true. I can't make this stuff up…
Generally speaking, land around Tonopah that's north of I-10 is priced higher than land south of I-10. But there are other considerations–proximity to electricity can make a HUGE difference. Whether or not the land is in a flood plain also makes a big difference. As for being closer to the foothills, that's a tough call. Some people want to be closer to the freeway, some want to be closer to the foothills/mountains.
If you'd like, email me at jayATthompsonsrealty.com (changing the AT to an @ of course). If you haver the APN (Assesors Parcel Number) of the parcel, I can look it up on the tax records and give you a close idea of it's value. If you don't have the APN, I can probably find it if you can give me your full legal name. And don't worry, I won't hassle you to list the property. Be glad to do that if you're interested in selling, but I won't pressure you. That's not the way I work.
Wake up you idiots Phoenix is headed for the toilet. Which is exactly where it belongs. Prices will fall 60% by year end. Have a nice ride.
I have 10 acres on a corner on 339th and I just amended our
CC and R's to allow for commercial and/or retail. I am
willing to sell and so are some of my neighbors. If anyone here
knows someone who would be interested please let me know.
Thanks!
Hi Beth, thanks for visiting and commenting!
The zoning, not just the CC&Rs will need to be changed to allow for commercial development. Sounds like you're in an unincorporated part of Maricopa County, so you'd have to get the county to re-zone your parcel. Sometimes that's easy, sometimes it can be quite painful and tedious.
You can find a lot of info on Maricopa County zoning codes on my main site at: http://www.thompsonsrealty.com/Maricopa_County_Zo…
Thanks for the information, I will look into it! Have a GREAT day!
I would be curious to know what that same parcel is worth today. Obviously, it must be less. The question to me is how much less. Is it back closer to what they paid for it?
Land here in the "ex-burbs" has plummeted. 25 miles from downtown Denver there is rarely any market at all. That does make it a truly great time to buy.
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I guess when you land locked in a sense prices have only one way to go. The problem right now is thier are so many homes for sale prices will take awhile to comeback.
My family has property out near Scottsdale… From overhearing convo, the value has just dropped…
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