Commercial Real Estate News / Investing / Arizona Land Saw Record Affordability in 2021 (Updated for 2023)

Arizona Land Saw Record Affordability in 2021 (Updated for 2023)

Published: 09-16-21 Category: Investing

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

We see the Grand Canyon in front of a sunrise.

This article was updated on 8/15/2023.

The trend of Americans gravitating to warmer weather and low-tax areas continues, and Arizona is no exception. The inexpensive price tags of land for sale in Arizona coupled with a booming economy attract many investors to pick and choose from the wide variety of plots available.

With its desert hills and deep forests, how picturesque Arizona leads the country in acreage affordability is a wonder. Nevertheless, buyers are taking advantage of its record-low prices, knowing that they will reap the benefits in the future when the value of their Arizona land increases exponentially.

More Raw, Undeveloped Land for Sale in Arizona Is Available

Since 2010, Arizona's average GDP rose 54.3% by 2020. Arizona's GDP in Q1 2021 sat at the highest it's ever been: $334.03 billion. While analysts are predicting Arizona's economic growth to slow in 2023 thanks to high inflation and interest rates, business opportunities continue to flourish and attract millions of people, filling up the urban and suburban residential properties.

As Arizona has already been a magnet to rural land seekers, the housing shortage led others to turn to fresh, raw, undeveloped land. The state currently boasts an abundance of undeveloped and homesite acreage that landowners can build houses on legally.

Developing on raw land can be difficult, but buyers learn how to use it residentially and commercially regardless. Ranches, camping sites, and other recreational uses are also some of the top applications of Arizona land. Additionally, owners purchase undeveloped plots as a hands-free investment for themselves.

How Much Does an Acre of Land Cost in Arizona?

Astonishingly, the Grand Canyon State's average price per acre was about $2,000 less than the second most-affordable state, New Mexico, at $4,164 per acre in 2021.

As of Q2 2023, the average price per acre of land for sale in Arizona goes as low as $1,000 to as high as $20,000+.

Reasons to Buy Raw Land for Sale in Arizona

Experienced buyers know that affordable land today will become priceless tomorrow and invest in and develop Arizona land while the acreage remains cheap. However, the price is not necessarily the only factor that moves people to buy raw land for sale in Arizona.

#1 – You Can Affordably Develop the Raw Land

Developing on new land can be complicated with the numerous fees and logistics involved. The exceptions are homesites, where utilities are available, and the zoning laws allow for building houses.

#2 – The Arizona Population Is Still Increasing

As mentioned beforehand, the state's upward trajectory in population will eventually lead to a significant lack of private land for sale in Arizona. These shortages will escalate the value of plots, which can be sold for a much higher amount than they were bought for. This is already starting to happen in Arizona's land market as of Q2 2023.

Homesites, or land that is ready for freshly built homes, will go faster than undeveloped plots will. The Valley's supply of homesite land was estimated to withstand two more years of construction in 2021 before the developable acreage runs out.

#3 – Opportunities Exist for Passive Income

Buying land for sale in Arizona can lead to many opportunities for passive income. Landowners in the Grand Canyon State can lease their plots out to hunters, farmers, and other outdoor enthusiasts as average cropland rents continue to rise in 2023.

If you fancy more a traditional commercial real estate approach to making money, you can develop investment properties on your land that you can then rent out to qualifying tenants.

Things to Consider When Buying Land for Sale in Arizona

Just like any other investment, there are a few things you'll want to research and keep in mind when hunting for Arizona land for sale.

#1 – Zoning Laws

Zoning laws refer to the regulations that counties impose on land development. Homesites are meant to have much more flexible zoning abilities than undeveloped land. Owners can immediately start a project on a homesite while completely raw land will involve more strict zoning regulations and environmental assessments.

That doesn't mean that it's impossible to develop on raw land, but buyers will have better luck fulfilling the intended use for their land if they are aware of the zoning laws for the estate they're purchasing.

#2 – Utilities

Completely undeveloped land won't always have access to utilities, such as electricity. That means new owners will have to oversee the additions of utility access to make the plot liveable.

It's crucial to ask the seller specific questions about the feasibility of connecting your new property to utilities. Ask questions like:

How close are the nearest utility accesses?
How much will it cost to install utility access in this area?
Where exactly can utility accesses be created?

Purchasing raw land with a faint idea of where exactly utility accesses can be used will make for a challenging time fully equipping the plot with the proper attachments.

#3 – Water

Just like access to power and other utilities, water and sewage solutions for rural properties will be more out-of-reach than for homesites. Some may be covered by the local county, which you can find out by contacting zoning authorities.

Otherwise, accessing clean water can be possible by holding tanks or drilling wells that bring water from streams or rain. Creating water access still must follow all zoning regulations in the area, no matter what type of system is used.