Phoenix-area homebuilders adjust to market

A deep plunge in both home foreclosures and pre-foreclosure notices in the second quarter ultimately could lead to a boost in business for Phoenix-area homebuilders, who have settled into a slow-but-steady sales pattern during the past two years. However, builders and analysts said there were several other hurdles to be negotiated before the homebuilding industry could experience anything resembling a recovery. Those challenges include the inability of many prospective buyers to obtain financing, lack of buyer confidence in the economy's future, a growing shortage of skilled labor in the homebuilding sector and continued stagnation in the Phoenix-area job market. Executives at locally active builders, including Shea Homes, Taylor Morrison and Robson Communities said they had scaled back costs and are prepared financially to endure the remainder of the foreclosure era. The builders said they did not expect to see a meaningful increase in sales for at least another year. Still, they pointed to a number of positive trends that could turn out to be the seeds of a future uptick in new-home sales. Those trends include the growing number of Baby Boomers reaching retirement age, increased foot traffic at new-home sales offices in the Phoenix area and a mild price recovery under way in the existing-home market. Maricopa County home foreclosures decreased significantly in the second quarter, shrinking from 15,831 transactions in the second quarter of 2010 to 10,875 transactions, according to Mesa-based real-estate market research firm Ion Data. Likewise, notices of coming foreclosure decreased from 19,664 notices in the second quarter of 2010 to 13,311 notices, Ion Data analyst Zach Bowers said.

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