Arizona is a captivating state with breathtaking natural beauty, featuring the iconic Grand Canyon, stunning desert landscapes, and vibrant sunsets. Its warm climate, diverse wildlife, outdoor recreational opportunities, and beautiful adobe Spanish home designs make it a top spot in recent years for real estate. So why is land so cheap in Arizona?
The Housing Crisis of 2008 in Arizona
The 2008 housing crisis had a massively significant impact on Arizona. The state experienced one of the highest foreclosure rates in the country, as the housing market collapsed and home values plummeted. Many homeowners faced foreclosure, leading to a decline in property values, an increase in unemployment, and a slowdown in the overall economy. The crisis exposed the risks of speculative real estate practices and it had long-lasting effects on the housing and land markets financial stability in Arizona.
If you remember this crisis it was quite devastating on the real estate market. Arizona was another story, I remember nice condos in the $250k range going for $70k after the crisis. I even saw a fourplex for sale at $30k which is absolutely wild. So overall, for a growing area at that time is wiped it out. Arizona was just becoming a hot spot at that time, there were so many new construction projects left worthless and bankrupt. But what about Arizona land, how come you can get land as low as $2k-$3k or so.
One of the biggest reasons for cheap land in Arizona is the foreclosure process in Arizona. There were so many developers in the pre-construction phase and these properties are just now being released to the public once again. This means developers went bankrupt and hundreds of parceled lots went to the county for unpaid taxes. They had parceled out large acreage, put in street plans, golf course plans and modeled and sold these pre-construction lots to unsuspecting buyers. The also still held a big portion themselves still. Buyers would pay $50k+ to get these parcels thinking this beautiful area would be built around it leaving them with a great home build site or a valuable parcel of land.
Once the crisis happened the developer went bankrupt and land owners were left with nothing but a parcel with no plans of anything around it. A huge loss to these buyers and most of them gave it up as a loss, also letting it go back to the county. Counties in Arizona have held these properties in foreclosure for a long time, sometimes up to 10 years. Once the market was better, around 2018-Current, they released them in troves to buyers. Lots once valued in the high end were sold for very low amounts and the land market in Arizona became oversaturated for a while. Now what we are seeing in Arizona is way more ownership and holding, with less land being released. Some Arizona properties we sold in the $3k-$5k range are valued upwards of $30k in just a few years.
The Advancement in Off-Grid Living Options
Back in the day living off-grid was pretty hard, you had to be very detached from society and a lot of Arizona land is still off-grid. Now, you have massive communities living off the grid, and they are living life just like the rest of us. With advancements in solar, satellite internet, cell phone coverage, water delivery options and even Amazon delivery we are living in a different world. It's taking time for people to realize this, but those that are are buying Arizona land and building comfortable small home or even great air-stream RV living situations, mortgage free. So while you can still get Arizona land pretty cheap, there is no doubt that it's popular and growing in price value.
Counties are also taking advantage of this value, increasing assed values which then increases their tax income. This is giving counties the funds to expand infrastructure like roads, power lines and city water. This will only further growth in value of sales and allow them to increase assessed values and raise property taxes even more. The point is, these prices in Arizona are already going up and the affordable properties are becoming less and less till you go way remote, like miles and miles from the nearest city.
Real Estate Outlook In Arizona
The Arizona land market has been growing in popularity in recent years by leaps and bounds. The state's warm climate, natural beauty, and diverse range of attractions make it an attractive destination for both residents and investors. Cities like Phoenix, Scottsdale, and Tucson have experienced significant population growth too, driving demand for housing. Additionally, Arizona offers favorable tax policies, a lower cost of living compared to some other states, and a thriving job market, further contributing to its real estate market's popularity. More people are also warming up to off grid options, using Airbnb to make income for Arizona snow bird vacationers and more. The outlook is still good, but it's not as cheap as it was a few years ago. Finding deals in Arizona is still possible, but for how long is the question.