Scottsdale builders seeing surge in new homes

Apartment development is the focus of Scottsdale's housing market, but builders based in the city say they are seeing a surge in new-home sales elsewhere in the Valley.

Builders acquired permits for nearly 2,500 single-family homes in the first quarter, up 74 percent from a year ago, said Greg Burger, publisher with RL Brown of the "Phoenix Housing Market Letter."

Maracay Homes reports that it sold 190 homes through April, more than double its activity a year ago. Plus, this year's $50 million in sales far exceeds last year's pace when Maracay sold $60.5 million for all of 2011.It's a big change for a new-home market that went from dormant to sluggish before the recent uptick.

"It hasn't been wine and roses the past few years," said Andy Warren,Maracay president since April 2009.

The number of building permits issued continued to grow in April and homebuilders are responding with new communities and floor plans.

Maracay Homes, with its offices at the Scottsdale Quarter, has four communities in Tucson and seven in the Valley in Buckeye, Chandler, Goodyear, Peoria and Queen Creek.

Maracay, the Arizona subsidiary of the Weyerhauser Real Estate Co., plans to open five more communities with a total of 414 home sites by the second quarter of 2013. Those developments are in Litchfield Park, Queen Creek, Gilbert, Chandler and in east Mesa at Eastmark on the former General Motors Desert Proving Ground site.

The builder has two more communities under contract with 135 home sites in Queen Creek and an additional 22 at Verrado in Buckeye.

"We've repositioned Maracay in the last two years to take advantage of the challenges in the economy," said Warren, who previously worked for Weyerhauser's Winchester Homes subsidiary in Bethesda, Md.

Maracay expects to sell 300 homes in the Valley this year and an additional 100 in Tucson, he said. The company's average home price this year is $260,000.

Home inventory declines

A shrinking inventory of resale homes has buyers turning to new homes, and builders are responding to the demand.

The current pace of 11,000 homes this year could slow because of a tighter supply of suitable home sites and as builders limit their sales because of shortages of subcontractors, said Burger.

Buyers are getting frustrated with failed bids for a shrinking inventory of resale homes and are turning to new homes, he said, adding that the price difference of new homes costing more than resale properties is narrowing in some neighborhoods.

"We're moving in a direction that new homes are coming into focus," Burger said. "Some builders have opened the flood gates and are selling as many homes as they can."

Shea Homes Arizona has seen its sales jump 40 percent so far this year over 2011.

The California-based company, with its Arizona division in Scottsdale, is averaging about eight home sales per week, up from five over the past two years.

"It's pretty refreshing," said Ken Peterson, Shea Homes Arizona vice president of sales and marketing.

Sales are on the upswing because consumers who lost homes to foreclosure or short sales are becoming eligible for loans, he said.

Few new homes locally

Nearly all of the new-home subdivisions are outside of Scottsdale, which has a limited amount of large land tracts for new communities.

Scottsdale issued 63 building permits for single-family homes in the first quarter, up from 33 a year ago but far below Gilbert with 697 permits and Phoenix with 347.

Pulte Homes and Lennar each are building about 200 homes at the gated Lone Mountain community just west of Scottsdale at 60th Street and Lone Mountain Road.

Pulte spokeswoman Jacque Petroulakis said the builder has seen its traffic and sales more than double in the past few months.

Retirees, move-up families and second-home buyers are part of the sales surge, she said.

Pulte, which launched sales at Lone Mountain in April 2010, has homes of 1,933 to 3,026 square feet for $298,990 to $369,990.

Utility-cost savings are a big selling point for the new-home market, with builders touting better insulation, construction techniques, and more efficient appliances and heating and cooling systems..

Builders are also offering garages large enough for recreational vehicles and stand-alone buildings for shops, studios or guest casitas.

New communities planned

Scottsdale-based Maracay Homes has seven Valley communities and four in Tucson. It plans to open these five communities with 414 home sites in the next two years:

Savannah in Litchfield Park, 70 homes with lots of 85 by 130 feet. Opening May 19.

Montelena in Queen Creek, 59 homes with lots of 90 by 140 feet. Opening fall 2012.

Lyons Gate in Gilbert, 46 homes with lots of 60 by 118 feet. Opening late 2012.

Vaquero Ranch in Chandler, 74 homes with lots of 60 by 120 feet. Opening second quarter 2013.

Eastmark in east Mesa, 165 homes with about half the lots at 55 by 115 feet and half the lots at 70 by 120 feet. Opening second quarter 2013.

by Peter Corbett - May. 10, 2012 03:22 PM The Republic | azcentral.com



Scottsdale builders seeing surge in new homes

$13.6 mil award in lawsuit vs. homebuilder

An arbitration panel has awarded $13.6 million to the owners of 460 Sun City Grand homes in one of the largest construction-defect cases in Arizona history.

The case against developer Del Webb Communities Inc., a subsidiary of PulteGroup Inc., began in 2008 with about 1,100 households. With close to 10,000 homes in the Surprise retirement community, the plaintiffs list, which includes Surprise Mayor Sharon Wolcott, makes up about 10 percent of the population.

Attorney Stephen Weber said that 413 of the households could not join the arbitration for legal reasons and are awaiting a trial date in Maricopa County Superior Court. That case is expected to go to court later this year or early in 2013.

After four years, some plaintiffs dropped out, some sold their houses and some died waiting for the legal system to run its course. That left 873 households.

"That was definitely a problem, taking four years when you have a senior community," said Weber, who is with the Phoenix firm Kasdan Simonds Weber & Vaughan.

The final arbitration awards released on Thursday ranged from several thousand dollars to close to $100,000 each for homeowners who moved into the affluent retirement community, only to find cracks forming in walls, floors and ceilings.

The $13.6 million award includes $7.9 million in damages and $5.7 million in legal fees and costs. The homeowners had asked for close to $50 million. Pulte attorneys had argued that the home repairs should total about $2 million.

James Zeumer, a vice president of PulteGroup, insisted that Del Webb had acknowledged that many homes involved in the case did need to be fixed. He said the company had been willing to make appropriate repairs but could not once the suit was filed.

"We plan to challenge this award in state court, as we believe several items are unacceptable, including the decision to award attorneys and experts nearly as much as the homeowners," he added.

Weber said that any challenge would be a "frivolous" suit since arbitration awards can be appealed only for a narrow set of criteria that focuses on corruption and bias.

Del Webb, which merged with Pulte Homes in 2001, began constructing Sun City Grand homes in the 1990s. Homeowners who spotted construction problems did not bring in attorneys until 2006. Given legal limitations, that meant that some homes already were too old for the case. Weber said the group filed under an implied eight-year warranty on new homes.

Del Webb/Pulte Homes sent out letters when the case started in 2008, warning homeowners that "greed too often is the motive" for construction-defect attorneys with "unhappy homeowners too often the result."

Weber said that the company had time to repair the homes before the case moved forward, but they failed to do so.

by Lesley Wright - Mar. 5, 2012 06:55 PM The Republic | azcentral.com



$13.6 mil award in lawsuit vs. homebuilder