“It’s A Buyers Market. So, When Are You Going to Buy?”
The best strategy for Arizona real estate and the best way to make money in real estate is to buy low, when the conditions are in the favor of the buyer to buy. Your start-up purchase is where you “begin” your investment growth—and that’s why we submit to our buyer friends the above headline question, again: “It’s a buyers market. So when are you going to buy in Arizona?”
An irony is that investors are shying away from Arizona land at precisely the best time to buy. Arizona is one of the top 3 states in the nation in real estate price appreciation over the last 40 years. It has the highest % of population increase due to the climate, economic growth, and the diverse, attractive land and elevation settings. Baby boomers are getting older and cannot handle the harsh cold climates any more and are selecting Arizona’s mild winters as a second home whether it is a home or rental or maybe bringing their recreation vehicle. Prices are down significantly. There is no or little downside left and land always goes up in value over time. The joke about not making any more of it is no joke. They can still find gold- but we’ve found all the land. Environmental laws, population growth, rising farm values, demographic migrations and other factors continue to put upward pressure on land values. It’s just a matter of time before land recovers and continues its upward historical march, and by the way with Arizona land you might get to use it while you own it. Try taking a vacation, picnic or hike on your CD, stock certificate or gold coin!
“One hint for investment hunters: Look where the paved road ends. Land that’s outside city limits, but in the path of development, can appreciate dramatically when new infrastructure (road, city water and sewer) goes in.”
“…Most types of rural land have not lost value in recent months. The factors that have steadily lifted their worth during the past decade are not mainly speculation and cheap credit….The least vulnerable second homes are those within a reasonable driving distance of metropolitan areas typically 4 hours or less….But quality land will ride out a recession. Population growth, not speculation, is the flood lifting this boat…The floor under Arizona land is its long-term appreciation. That’s why pension funds, endowments, investors and trusts are putting money into it. Quality land, bought at the right price with sensible financing, should weather a recession better than stocks and many other investment alternatives.”
“Real estate, after all, is the quintessential scarce resource. You simply can’t go out and create new land. So it seems only natural that its price would keep going up and up over time as the population grows. There’s also something intuitive about real estate: Compared with, say, the abstract nature of corporate equity, real estate is tangible. We see it. We rent it. We walk on it. We live in it. And, chances are, we’ve made money off it: Of the more than two-thirds of Americans who own their own homes, a significant portion have seen them appreciate over the years.”
Here’s a look at what’s new in real-estate markets across the U.S. from around the Web. Homes on the range Buyers of all sorts — executives, physicians, professionals and business owners — are looking to lasso ranch properties with scenic views or attractive panoramic settings.. The ranches, which are typically at least 5 acres in size and up, are mostly being purchased by Arizonans and out-of-staters as purely recreational properties and aren’t working ranches in the true sense of the word. Selling prices range from $4,000 to $20,000 an acre. The ranches are coveted for their views, unique settings and access to creeks, ponds or streams and organic farm or horse property capabilities — last year’s median price for rural land that has legal and physical access in the north central part of the state was $3500-$15000 an acre.
What makes Cheaper desirable Land parcels such a good investment?
History has proven it is literally impossible to lose money owning quality land if purchased cheap enough and if held long enough. Markets typically range from 7-12 year cycles from high to low to next high depending on areas of the state. The lower priced land in most cases will double up much sooner than higher priced parcels. As an example a $5,000 lot may go to $10,000 much quicker than a $50,000 lot going to $100,000 assuming a quality parcel of land is owned. There are many more buyers at the $10,000 level than at $100,000.
Though it’s true that today’s stock prices are also ‘cheap’, there remains a significant difference between stocks and land. No one can predict with absolute certainty how the stock market will perform. No one knows which companies will survive and prosper in the years ahead and which companies will be mismanaged by greedy CEO’s, outdated by new technology, or otherwise fail to perform. But every single acre of land that exists today will still be here in the future. Many large and profitable companies of 25 years ago are gone and worth nothing today (hopefully you didn’t own much stock in Enron), but every single acre of land is still here and worth far more today than 25 years ago. As for gold as a hedge versus land, gold will climb up during crisis and inflation, but will typically retreat back over 60% or more when the cycle passes – land will hold or even trend up in most cases. Even in this economic crisis, if land was purchased right, and the parcel is a quality piece, it has held its value. It may not be liquid, but it kept you out of the stock market and the land will come back much sooner than most stocks.
Why will land values continue to rise? There are many reasons why, but three are most important. First, simple economic inflation causes everything to increase in price, including land. Second, an expanding population creates an increasing demand for land; however, new land cannot be manufactured to accommodate this increasing demand. The third, foreign investors will buy land in increasing numbers as the new emerging countries develop more wealth and will hedge their portfolios from inflation. The good old USA has a strong monetary system and the most powerful army in the world which will protect the investment.
Thus an investment in good quality cheap land can offer security, future financial rewards, and a hedge against economic inflation.
Real Estate Tips:
- One Acre = 43,560 square feet which = 4,840 square yards
- One Mile = 5,280 feet
- One Square Mile = 640 acres
- One Section = one square mile
- One Township contains 36 Sections
- One Hectare (for those on the metric system) = 10,000 meters squared = 2.47 acres
Here are some possible benefits to raw land:
- Land has the potential to experience tremendous appreciation if bought in the way of growth, or if a higher and better use can be achieved.
- Owner financing can often be obtained through the seller at below-market rates.
- Subdividing can create added value and provide for immediate returns.
- Privacy and pride of ownership can provide a secure feeling to the holder.