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By: Peter O'Dowd on 02/07/2013
Homebuilders in Arizona made a push to buy up empty land at the end of December -- another sign they are feeling confident in the market. The 2012 year-end report by Arizona State University’s WP Carey School of Business shows those builders have renewed interest in empty dirt lots.
A solitary manhole cover in a stalled development in suburban Phoenix. (File Photo by Peter O'Dowd - KJZZ)
"Prices have been going up and the fact
they’re buying now means they want to buy rather than wait until they go up
even more," said the report's author, Mike Orr. "Land prices tend to be more volatile than the homes themselves."
In December alone, builders swiped up 2,272 lots, especially in East Valley cities like Gilbert. That number is twice the current sales rate for new homes, which suggests builders are preparing for continued growth through 2014, according to the report.
Orr added the lots most likely to be developed first are those that were abandonded by builders when the market crashed, and already have access to utility hookups.
Scottsdale-based Mertiage Homes said it invested $480 million last year in land and development, includes the acquisition of 9,000 new lots.
Meanwhile, ASU's report said a terrible chapter in the Phoenix-area’s housing market is coming to a close.
It showed about 11,000 pending foreclosures in the Metro area, a number that continues to inch downward.
"Once we measure the number pending of pending foreclosures maybe down to 7,000 or 9,000, then I would consider that pretty much back to normal," Orr said. "And I suspect we’re going to reach that later this year."
Foreclosures fell 51 percent from December 2011 to December 2012.
Orr’s report also shows the median sales prices of a single-family home went up 34 percent in the past year.