Evaluating the Arizona Land Market

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Evaluating the Arizona Land Market

Bart Waldon

A vibrant land market exists across Arizona with over 4 million acres exchanging hands just between 2016-2020 according to a recent report from the USDA Natural Resources Conservation Service. However, tracking conditions and identifying localized value changes remains challenging even for seasoned investors and landowners in the state. Raw land sales continue climbing over recent years with purchases for recreation, ranching and undeveloped plots totaling approximately 1.1 million acres in 2021 statewide. Key drivers range from population growth and urban expansion in counties like Maricopa fueling demand to escalating rural prices aligned with commodity crop values. 

Determining an accurate read on Arizona’s land market requires an area-by-area examination weighing factors from parcel acreage and use rights to regional sale price variances and development potential. This evaluation aims delivering an informed profile exploring market dynamics county-by-county across Arizona based on the most current data sources available.

Taking Stock of the Local Land Market

With over 113,000 square miles spanning deserts, forests, canyons and alpine peaks, Arizona’s landscapes are as varied as its real estate markets. Several key trends shape the local land market:

  • Steady population growth, especially in Phoenix, Tucson and northern Arizona, is increasing housing demand. Maricopa County saw 18% growth between 2010-2020.
  • Over 90% of Arizona’s land is owned by the state or federal government, constraining private development.
  • Recreation and tourism drive the economy. National parks and outdoor activities attract visitors worldwide.
  • Climate varies from hot, arid lower elevations to cooler alpine regions with heavy snowfall.
  • Water access shapes development. While scarcer in desert regions, it’s more abundant in northern counties.
  • Public lands limit private holdings. Parcel configurations in areas like Coconino County impact value.
  • Arizona has an open competitive bidding process for vacant state trust land sales.

These factors create unique micro-markets across counties. Prices and sales vary sharply between regions. Local expertise is key when evaluating deals.

Key Factors That Impact Land Value

Raw land is among the most nuanced real estate assets. Seemingly minor details can significantly sway value. Here are key considerations when assessing parcels:

Location - Proximity to growing metro areas like Phoenix and highways boosts value. Remote rural sites will be far cheaper per acre. Being near parks or landmarks also commands a premium.

Lot Size and Shape - Irregular smaller lots sell for less than sizable rectangular parcels on a per-acre basis. Dimensions and road access are critical.

Zoning and Land Use - Properties already zoned for development offer more flexibility and upside. Understanding entitlement processes in the county will aid buyers.

Access and Visibility - Land on paved roads or highways with visibility and signage potential is more desirable than remote backcountry sites.

Utilities - Parcels with existing electric, water, sewer and gas stubs or nearby public utility access will fetch higher sale prices.

Improvements - Cleared sites with grading, gravel roads, fencing or foundations add value beyond raw acreage. Prior extraction of minerals or timber may also sway pricing.

Surrounding Parcels - Adjacent uses like residential or commercial sites make land more enticing than isolated rural acreage. Being inside an incorporated town also boosts attractiveness.

Environmental Factors - Buyers should know if the property contains protected species, wetlands or other sensitive habitats that may constrain development.

Comparable Sales - Recent deals for similar land in the same county offer the best valuation gauge. Brokers can usually provide recent comp sale data.

By focusing intensely on these key attributes, investors can accurately underwrite deals and avoid overpaying for inventory. But further assistance is often beneficial when buying vacant land in Arizona’s complex property markets.

Partnering With a Land Acquisition Company

If you're new to buying raw land, we'd highly recommend partnering with an experienced land acquisition company. Firms like Land Boss handle complicated land deals in Arizona every single day - they know the local markets inside and out. Their expertise can help you avoid potential pitfalls and identify the most promising opportunities.

Some of the key benefits of working with a pro land company include:

  • They understand property values in different submarkets across the state and can negotiate expertly with sellers - no amateur mispricing mistakes.
  • Land companies have connections with brokers, owners, and developers to find great deals before they even hit the MLS. Getting access to off-market inventory is invaluable.
  • They handle all the site visits, title reviews, legal and environmental due diligence to spot any issues upfront. This dramatically reduces your purchase risk.
  • If you need capital to close on a purchase, they have lending relationships to fund deals fast.
  • Firms manage the entire closing process and paperwork end-to-end, ensuring smooth transactions. Super helpful when dealing with rural land plots.
  • Even after purchase, they provide guidance on property taxes, marketing your land inventory, and ultimately selling parcels for a profit.

Having an experienced land acquisition company in your corner is a huge asset when building a real estate portfolio over time. The expertise and connections they bring to the table can really help your investment strategy click.

Key Takeaways for Arizona Land Buyers

If you're looking to buy vacant land in Arizona, here are some tips that can help:

  • Do your homework on every property - don't just rely on emotions or assumptions. Really dig into the factors impacting value.
  • Before closing, verify the zoning works for how you want to use the land. The last thing you want is an unpleasant surprise later.
  • Look at recent land sales in that county to gauge realistic pricing. Comps are your friend!
  • For complicated deals, bring in a land company to help mitigate purchase risks. Their expertise is invaluable.
  • Time your entries and exits based on the real estate market cycles. You want to buy low and sell high.
  • Target locations near expanding metro areas and major roads. Accessibility boosts land value.
  • Seek out parcels with utilities already on site or close by. It makes the land more desirable.

Stick to these guidelines and with some patience and perseverance, you can build up a solid portfolio of Arizona land holdings. It's a competitive market, so partnering with seasoned land pros helps guide your bigger purchase decisions and enhances your buying power. The bottom line - with the right strategy, Arizona has plenty of diverse land options to choose from if you want to create a successful real estate investment portfolio.

Should You Invest in Arizona Land?

Rapid Population Growth

Arizona is one of the fastest growing states in America, with the population increasing 18% from 2010-2020. Major metro areas like Phoenix and Tucson are experiencing a surge in new residents and housing demand. This steady growth supports higher land values over time.

Favorable Location

Situated in the Southwest United States, Arizona benefits from a sunny climate and proximity to major hubs like Los Angeles, Las Vegas and San Diego. The state's vast natural scenery, outdoor recreation and tourism also help drive economic activity.

Buyer-Friendly Options

Unlike some states, Arizona has a competitive bidding process for purchasing vacant state trust land. This increases inventory options for buyers looking to acquire parcels directly from the state.

Development Potential

Although over 90% of Arizona's land is owned publicly, ample opportunities exist to buy private property for residential or commercial development. Proximity to expanding urban centers and infrastructure drives value.

Diverse Land Types

From the cactus-filled Sonoran Desert to ponderosa pine forests, Arizona's varied topography provides diverse land investment options. Parcels can be found ranging from red rock desert acreage to alpine mountain terrain.

Key Considerations

While Arizona presents a strong case for land investing, thorough research and diligent due diligence are still essential. Seeking guidance from firms like Land Boss who understand local market nuances can help mitigate risk and identify the most promising opportunities.

Final Thoughts

With Arizona's surging population and economic growth, room to expand in developing areas, and wealth of scenic land types to choose from, the state presents a compelling opportunity for real estate investors to build a portfolio. By partnering with experienced local firms to navigate zoning, regulations and land valuations, buyers can avoid potential pitfalls and capitalize on this buyer-friendly market. For investors seeking long-term appreciation and profit potential, Arizona land represents an investment worth exploring.

Frequently Asked Questions (FAQs)

What types of land are best for investment in Arizona?

For my money, properties near growing cities like Phoenix or up-and-coming spots in Northern Arizona offer solid potential. Land already zoned for housing or commercial uses gives you more flexibility too. Access to roads and utilities is key.

What is a reasonable price per acre for raw land?

There's no one-size-fits-all answer on this one. Pricing varies a ton between counties. In Maricopa you could pay anywhere from $10k to over $100k per acre. Looking at recent sales of similar parcels nearby is your best bet for figuring values.

How long does it take to sell land in Arizona?

From what I've seen, plan on 1-2 years if you want to sell for a good price. Rural or oddly-shaped properties might take longer to move. Hiring a knowledgeable real estate agent and marketing the land well helps attract buyers.

What costs are involved in developing raw land?

Depending on the property, you could be looking at permitting, grading, road building, utility installation, landscaping - the costs add up. Chat with local planning departments first to understand what it will really take to get that land ready to build on.

Are there financing options for buying raw land?

Absolutely. Beyond regular mortgages, you can look into seller financing, private lending sources, crowdfunding, hard money loans, or partnerships to buy the land. Companies like Land Boss have access to investors and capital too. Get creative!

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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