What Do They Mean by “Dirt Cheap”?
by What Do They Mean by “Dirt Cheap”?
October, 2007

I’m puzzled by the term that often is uttered by people referring to something as “dirt cheap”! The term probably derived from my foolish relatives who turned down land at Lincoln Drive & Scottsdale Road in 1952 for $2,500 per acre because they said, “Who would want it”? What they didn’t understand back then was the fact that Arizona only had 17% of its area as private land. In Kansas, where my dad was born, I’m sure the land was dirt cheap and you could see prairie land for miles. Because there was so much of it, and therefore not subject to supply vs. demand principles, land was really cheap dirt. Hence, when someone found a good deal, they made the analogy of it being “dirt cheap”.

Now, as a smarter third generation Arizona native who knows the difference between “dirt cheap” and “cheap dirt”, let me tell you my story that explains this variable.

In 1991, we had a similar real estate market slowdown like the one we’re in now. I sold the 64 acre Sunrise Business Park of improved industrial land to the Baptist Foundation for $32,812 per acre, or $0.75/SF. In that same year, Pulte bought 68.22 acre at Chandler Blvd & Rural Road for $37,822/acre, 143.85 acres at Ray & McQueen for $22,199/acre and 86 acres in Red Mountain Ranch for $25,267 per acre. All three of these land deals included hard zoned medium density subdivisions. On the west side, I sold 115 acres at 115th Avenue & Camelback Road for $8,260/acre and 71 acres at 99th Avenue & Indian School for $11,351/acre. In 1993, the poor west side was still suffering and I sold a 98 acre rose farm for $190,000, or $1,938 acre because it was in the flight pattern of Luke AFB and the Cotton Lane & Northern 286 acres for $2,503 per acre. Two other notable comps that year were 30.47 acre at 23rd Avenue & Pinnacle Peak for $21,332/acre and the 39 acre Phoenix Northgate auto mall land at Bell Road & I-17 for $64,102 per acre, or $1.47/SF. Over in Gilbert, with a little population of 10,000 – 15,000 people, I sold the 153.3 acre SWC at Cooper & Guadalupe for $19,960/acre. Just 10 years ago, in 1997, take note of 90.3 acres at Greenfield & Queen Creek for $9,020/acre and on the west side 386 acres at 91st Avenue & Broadway for $9,993/acre. By 1998, another 61 acres was sold at the SEC of Higley & Williams Field Road, now a Walgreens and Shea Homes subdivision, for $21,721/acre and 155 acres at the NEC of Ocotillo & McQueen in Chandler for $13,500/acre on terms.

If any of this doesn’t make sense to you, let me put it another way: many of the single family homes built on those land deals are now selling for more money than the original purchase price of the land. Why, it’s because the land was “dirt cheap” back then!

We “land pack” brokers understand that it’s not too late to still find cheap dirt. Today, I can sell you land in Holbrook, Arizona at approximately $300-500 per acre. We have great land in Willcox, Benson, Tombstone, Bisbee, Douglas and other parts of Cochise County for under $5,000 per acre. I can promise you that it won’t be dirt cheap for long.

For those of you who want to buy improved property, please understand that you’re really buying “location” because there will always be more retail, office, residential, industrial or commercial buildings that can be erected in or around your location. In essence, you’re competing with new product. What makes my investment strategy different is that they’re NOT making more land. We have reliable data from historical trending, demographic studies, and such, to make subjective arguments on where the growth will follow.

Please take some time to evaluate your investment portfolio and include Arizona land as part of it. If you heed advice from this native son who has heard all the stories from the “would’ves, could’ves and should’ves” on passed land deals, there is a difference between “dirt cheap” and “cheap dirt”. Those who buy cheap dirt now will look back some day and say, “My, that land was dirt cheap!”

Stan Strom is broker and owner of ACRES4U Land & Development in Chandler. Visit his website at www.acres4u.net or call (480) 503-0777.