Phoenix Shows Progress from Deep in its Residential Real Estate Hole

For big public builders, Phoenix ranks as a market they had to be in--even late into 2007, builders were buying into the arena because it's inevitably one of the nation's growth marketplaces for for-sale new housing. Inevitability's timeline, however, is not the same as that of investors and businesses who are trying to ward off the demons of short-term debt, near-term obligations, and/or a hefty operations expense base. That Phoenix will rise isn't the question. That Phoenix may take down more businesses before it does come back also seems to be a strong likelihood. Given public home builders' hyper focus for the next couple of years on striking a profitability balance in a weak-pulse demand environment and the relatively low barriers to entry in the Phoenix market, one might legitimately question why at least some builders don't exit the market altogether for the time being, and concentrate their operations on fewer markets that become their downturn limbo. They'll make money if they can achieve scale on a more localized level in fewer markets, so why not make a go of getting more of a tighter geographical sphere, and then plop back in as markets like Vegas and Phoenix begin to emerge from their dysfunctional states of being? Anyway, Raymond James & Associates analysts have spotted progress in Phoenix on some few but noteworthy levels. Here's their latest analysis of the Phoenix dynamic.

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