Home construction in metro Phoenix slowed in January

by Catherine Reagor The Arizona Republic - Feb. 24, 2010 12:00 AM

The federal tax credit for homebuyers boosted new-home sales in metro Phoenix last year. But the expiration of the credit looms, and new-home sales and building have slowed again.

In January, new-home closings in the Phoenix area fell to 479, the lowest level in decades, reports the "Phoenix Housing Market Letter." In November, Valley new-home sales surged to 1,312 as builders offered deals to rival foreclosure prices, and buyers rushed to take advantage of the tax credit. In December, there were 956 new-home sales.

Home building also slowed in January. There were 678 permits issued last month, compared with 799 in December. But building is up significantly from a year ago, when only 301 new-home permits were issued.

"Phoenix Housing Market Letter" analysts RL Brown and Greg Burger are projecting 8,500 new-home permits this year, an increase of a few hundred from 2009's permit level.

Home-price index

Metro Phoenix home values inched up in the latest S&P/Case-Shiller 20-city home-price index.

Overall, the 20-city index climbed 0.3 percent between December and January. Phoenix was one of only five cities to post an increase in home prices. Los Angeles posted the largest increase, 1.4 percent.

Between November and December, home prices ticked up 1.2 percent in the Valley, on a seasonally adjusted basis.

Year over year, the Valley saw home values drop 9.2 percent on the index. While the data lag, Case-Shiller is considered the best national index tracking the market.

Foreclosure bills

Arizona Democrats have introduced legislation to tackle the state's foreclosure crisis and to protect homeowners.

• HB 2715 would give homeowners facing foreclosure another 60 days to work out a loan modification.

• HB 2740 calls for allowing renters in homes that are in foreclosure to stay in the house and continue to pay affordable rents, and for homeowners who lose homes to foreclosure to remain as renters.

• HB 2766 requires a landlord to give a renter at least 30 days' notice if they have to move out of a foreclosure home.

• HB 2321 requires homes be maintained during foreclosure.

• HB 2739 creates a mandatory mediation program for those facing foreclosure that would be supervised by the Arizona Supreme Court.