Declines in foreclosures, home supply bode well for 2012

In many ways, 2011 has been the most difficult year Phoenix-area homebuilders ever have endured, but local builders and analysts said there are several reasons to anticipate a more robust new-home market in 2012. New-home permits expected to rise Based on current activity and market conditions, local analysts predict a dramatic increase in home-construction permits issued to homebuilders by 2014, though they are not expected to come close to the roughly 60,000 permits issued in 2006. 2011: 7,200 permits. 2012: 11,600 permits. 2013: 16,500 permits. 2014: 23,000 permits. Source: Belfiore Real Estate Consulting. All figures are predictions and subject to change. Nothing has come easy lately for an industry that just five years ago was building and selling about 60,000 homes a year in the Greater Phoenix market. This year, homebuilders are on pace to sell about 7,200 homes, a decline of about 500 sales from 2010, said Jim Belfiore, a home-building analyst based in Phoenix. Since late 2006, the number of speculative homes -- those built in anticipation of future demand -- has dropped to about 1,950 homes from roughly 12,500 homes, said Belfiore, president of Belfiore Real Estate Consulting.

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