Having trouble selling your house? The Arizona State Land Department feels your pain. Like homeowners forced to drop their asking prices in a cooling real estate market, state officials know they must settle for less when 1,276 acres of desert in Fountain Hills goes up for auction next year.
A recent reappraisal placed the land’s value at $95 million, a steep drop from the previous assessment of $130 million. The first appraisal came during the height of the real-estate boom, said deputy state land commissioner Jamie Hogue.
And like any bottom-line business, developers weren’t interested in buying property at the market’s peak. Tempebased SunCor Development, for one, said it would only consider buying it if the price was slashed 40 percent.
The new appraisal may now be more in tune with the market, but it’s still $17 million more than what SunCor wanted to pay.
When state officials learned there was no interest — not at a price exceeding $100,000 per acre, anyway — they postponed the auction, which had been scheduled for September.
The new auction date is March 15.
It remains to be seen whether land values will rebound, and it’s difficult to predict whether home buyers will buck a trend and consider purchasing houses on the Valley’s outskirts.
“A lot of people are saying, ‘We don’t want to go out to the middle of nowhere,’” said Jay Butler, director of the Arizona Real Estate Center at Arizona State University Polytechnic.
Fountain Hills annexed the land last spring, ending a 15-year quest to bring the property under control of the town — and not Maricopa County. As town officials said, it was crucial that the land be developed to the standards of Fountain Hills.
Mayor Wally Nichols recently said there is no rush to find a buyer.
But there’s no guarantee the real estate market will have pulled out of its dive when the new auction comes, Butler said.
He added that the state Land Department must be fairly confident there is developer interest to set a date.