Study: Home building on rebound in Phoenix area

Home starts are rebounding in the Phoenix metro area, according to a report released Monday by Metrostudy, a data collection firm based in Houston with offices in Phoenix. Home builders in the Valley began construction on 3,618 homes in the third quarter of 2009, up from 2,151 in the second quarter and 1,386 in the first quarter. That puts Phoenix ahead of two of the other U.S. markets that experienced a severe drop in new construction after the housing bubble burst: Naples-Fort Myers, Fla. and Las Vegas. Throughout the country, the report states, “Home builders’ sales and traffic are up, and traffic quality is improving greatly. Traffic quality refers to the likelihood that a person visiting a builder’s model will buy a home.” The report continues: “Even downtrodden Las Vegas, Phoenix, Florida and Southern California have shown significant improvement in sales per subdivision during the last several months. Some builders are experiencing the strongest sales paces in more than two years. Some of this improvement stems from the tax credits, but much of it relates to affordability as well as investor-driven demand.” The report suggests that October sales likely will be down, because potential home buyers were not sure whether the federal first-time home-buyer tax credit would be extended beyond the Nov. 30 deadline. Congress did approve continuation of the measure, with additional provisions to induce more home buying next year. The expected pause in home building should be brief, Metrostudy concludes, with greater activity in 2010.

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