Cochise County land price has stabilized around 60% of the peak market prices. Farm land and ranch land properties that were being sold for $3500 above in Cochise County in 2005 now could be bought for around $2000 per acre. Further price drop is unlikely for couple of reasons:
- At $2000 per acre, farm land becomes economically viable for agricultural use.
- A large number of the over-priced land acquisitions are funded by owner carry-back financing where the seller holds the deed of trust. When the credit crunch hit the market and when a large number of these speculative buyers became unable to repay the loan, the sellers often offer the buyer the option to sell back to the lender (original seller) using Deed In Lieu of Foreclosure. This will help stabilize the land market in Cochise County because:
- After the majority of speculators sell (revert) their land back to the original seller, it is unlikely the original sellers will give much more discount to sell their land. They have collected a few years of loan payments and the down payment (usually 20% of the sales price). They have no reason to further discount the land unless there are unusual circumstances.
- Agriculture lease becomes profitable and more popular. The original sellers will very likely to be willing to lease their land for agriculture use to generate steady cash-flow. Since the original sellers now have free and clear title to the property with NO debt, they are more willing to negotiate with farmers or ranchers and give them favorable lease terms. This will prevent them from discounting the land further and sell them for cheaper price.
As a result, Cochise County land prices will likely to stabilize at the current level. Cochise County has unique combination of factors which will enable it to be a fast growing region in Arizona. These factors include:
- Hwy 191, a future major truck route from Mexico, through United States, all the way to Canada.
- The US-Mexico border. Douglas is primed to be a major transportation hub.
- Defense industry. Fort Huachuca, outside of Sierra Vista, is the nerve center of U.S. military intelligence services. Davis-Monthan AFB in Tucson is only 30 minutes away. The vast land available in Cochise County provides unique opportunities for future defense industries such as unmanned aerial vehicles (UAV) and other air and land systems.
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