Glen Creno
The Arizona Republic
Jun. 28, 2005 12:00 AM

Valley home shoppers trying to figure how to make the numbers work on that fixer-upper with the splotchy carpet might look for bargains elsewhere – the new-home market.

A typical resale house in metropolitan Phoenix now costs more than a new one: $225,000 for the median resale home in May, compared with $220,617 for a new one, according to R.L Brown’s Phoenix Housing Market Letter. The pattern was similar in April.

That’s a reversal of the typical relationship between new and resale prices and another sign that the area’s housing market is defying expectations.

It doesn’t mean that new homes are the dollar store of housing these days. Demand is very strong for new homes with swarms of buyers competing for the limited number of lots being released by builders.

“When you have lines of people waiting for new homes, some people won’t (wait) and some of that demand has spilled over into resale homes,” said John Foltz, president of Realty Executives.

That’s creating frustration that is steering buyers toward the resale market. Investors also drove up prices when they moved into resales after builders began banning or restricting their purchases.

Also, Brown said, the resale market no longer is dominated by 20-year-old houses. Newer, larger homes are in the mix and their values are higher, he said.

There also is the question of whether buyers are balking at moving to the far fringes of the city to buy a new house, shopping instead in established neighborhoods. But builders say demand is strong across the board, including the edges of the urban area.

“You’re going to drive no matter where you live,” said Carolyn Morrison, vice president of sales and marketing for Beazer Homes. “Land prices have been lower farther out, and a builder can pass on that savings to the customer.”

Home building in the Phoenix area kicked back into gear in May, with permits for 5,994 homes issued in the area last month, or nearly 10 percent more than in May last year, according to Brown. He thinks the Valley is headed for another record home-building year despite earlier talk that the market would cool.

The latest numbers underscored the forces propelling an increasingly complex Phoenix market. Yet the basic drivers remain the same: low interest rates combined with a variety of mortgages, population growth, investors, move-up buyers and prices that still look affordable compared with other big cities in the West.

Prices for new and resale homes continue to climb, although market dynamics have turned the historic relationship between the two upside down.

“There’s obvious strength in the resale market that is allowing sellers to be more aggressive,” Brown said.

Some experts say the resale market is beginning to slow. The evidence: more listings, longer market times, more open houses and less of a frenzy in bidding wars and runaway prices seen in some areas. It is a complex market where values can vary greatly not only by city but by neighborhood, stretches of street and individual houses. Marilynn Niemann, of Coldwell Banker’s McDowell Mountain Ranch office in Scottsdale, said average market time in her area has climbed from about 20 days a month ago to 31 days. Yet she recently saw a production house sell for $360 a square foot in an area where $280 to $300 is the norm.

“I laughed when it came on the market,” she said. “It was just a house. But it sold.”

Even though permits fell slightly in April, there was little concern of a watershed slowdown in home building. Now the April numbers appear to be a statistical blip rather than a true reading of the market, Brown said.

Last year, metro Phoenix surpassed Atlanta as the top home-building market. Brown tallied 60,872 permits for the Phoenix area. Now, he says, the market is on pace to exceed that number this year.

“There’s not a sign out there today that says things are cooling off or things are going to go cold or we’re going to see a reversal in this market,” he said.

By Ryan J. Stanton, rstanton@ExplorerNews.com

July 6, 2005 – A new concept in residential design is hitting the Northwest in what’s being tagged by developers as “The Lofts at Marana Town Center.”

Southwest Value Partners is teaming with Richmond American Homes to plan the commercial and residential development expected to sprout around the new Marana Municipal Complex.

Conceptual plans not yet formally presented to the Town Council detail 304 small-lot homes that eventually will dot the landscape on 48 acres west of Lon Adams Road and south of Grier Road. The proposed development is somewhat high-density, but town officials say that’s what they expect to see built around the Town Center.

“I think this is going to be terrific. The town is headed in the right direction,” said Greg Wexler, an agent for Southwest Value Partners. “This is what they’re envisioning the Main Street and Civic Center Drive to look like. I think it’s really going to be a pretty interesting place to live for this community.”

The land surrounding the complex is jointly owned by SVP and a partnership headed by Wexler and several of his offshore partners from the Far East. Wexler, the local property manager, is overseeing development of the site after helping SVP develop Continental Ranch and Arizona Pavilions.

Two lot types are shown in conceptual drawings for The Lofts at Marana Town Center, including about 128 garden court lots and 176 “Z-lots.” The courtyard models feature lush common areas where the fronts of houses face away from the neighborhood streets with small access drives to the rear. The Z-lots are staggered with garages located at the back of the houses.

A wide range of one- and two-story homes, much different than what’s currently found in Marana, are shown in conceptual drawings, including Monterey, Spanish colonial, craftsman, Spanish hacienda and cottage-style homes. The homes range anywhere from 1,170 to 2,220 square feet, featuring four-sided architecture and “something a little bit more exciting” than what’s currently being built in Arizona, Wexler said.

“This has been built in California, Las Vegas and those kinds of places,” he said.

The homes, marketed toward small families, empty nesters, seniors and singles, will rise around 24 acres of commercial property broken down into blocks along Marana Main Street and Civic Center Drive. The Stockmen’s Bank, the largest state chartered bank in Arizona, is expected to be one of the first commercial tenants.

“They want to locate over here, probably on block four, so the first phase will be block four,” Wexler said, pointing to a 3.6-acre block of commercial property near Barnett Road on Civic Center Drive, though he’s uncertain when construction could begin. “Starting is one thing. It’ll have to be processed. It usually takes a year to get something processed, so probably within 24 months.”

Working with Marana, SVP built the old town hall on Lon Adams Road, which the town staff recently moved from. SVP donated the land and leased the building to Marana for several years before selling it below cost to help get the town on its feet.

Wexler has worked with the town to reconfigure land parcels and donated several acres near the town hall site, including about two acres for the fire station on Marana Main Street. SVP sold the remaining balance of the land for the Marana Municipal Complex close to cost, and with SVP’s input the town built the current infrastructure.

SVP is headed by Omaha, Neb. building tycoon Millard Seldin and former National Bank of Arizona President Robert Sarver, who owns the NBA’s Phoenix Suns. In addition to being an agent for SVP, Wexler owns his own brokerage company in Marana, Wexler and Associates, along with several of his offshore partners.

“Southwest Value Partners, I think they’ve always done what they said they would do,” said Vice Mayor Herb Kai. “They were instrumental in developing out the Continental Ranch area. They’ve been around long enough where they’re going to do what’s right for the town and our residents.”

Wexler, a Continental Ranch resident, has been in the real estate business since the 1980s after he relocated from Chicago. In Tucson, he became partners with Kai’s now former wife, Suzanne, and helped the Kais purchase and plan several properties.

The town is still working with architect Vern Swaback to finalize plans for the Town Center, setting a course for development that will create an identifiable downtown area. Town officials say those plans are expected to receive approval from the Town Council soon.

“Greg’s group was instrumental in helping us get our new Town Center organized, so they have a lot at stake in this,” Kai said.

About eight years ago, SVP owned nearly 30 percent of the prime office space in downtown San Diego, but recently sold the last of its properties, receiving $274.5 million for three buildings it purchased for $91 million. Sarver purchased the Phoenix Suns last year for slightly more than $400 million.

Wexler partnered with Sarver in 1984, helping him open the National Bank of Arizona. A University of Arizona graduate and Tucson native, Sarver started the bank at the age of 23. Last week, he rang the bell at the New York Stock Exchange and took his Western Alliance Bankcorporation public.

Mark Schlossberg, a partner of Wexler and Sarver, is working with Sarver to build a boutique hotel adjacent to the Phoenix Sun’s arena in Phoenix and is in the process of purchasing a handful of other properties downtown.

In addition to SVP, Wexler and Schlossberg have a limited liability company, Continental Ranch Development Co., which purchased the land on the east side of the Santa Cruz River to finish out development in Continental Ranch. Sarver has another company that’s managed locally by Wexler, Ranch Holdings, which owns land on the west side of the Santa Cruz River in Continental Ranch.

During a meeting that lasted more than three hours June 29, the Marana Planning and Zoning Commission gave approval of a preliminary plat for a 50-lot subdivision known as The Villas at Continental Ranch, located on 18 acres at the northwest corner of Coachline Boulevard and Silverbell Road.

The commission also approved a development plan for a Fletcher’s Tire and Auto shop to be constructed at the southeast corner of Cortaro and Silverbell, and later a approved a preliminary plat for a 10-lot commercial subdivision at the southwest corner of Arizona Pavilions Drive and Cortaro Road, where In-N-Out Burger, Panda Express and Chili’s Grill & Bar are expected to locate.

The commission also approved preliminary plats amounting to 1,768 new homes in the following developments:

€A 367-lot subdivision known as Payson Farms, located on 106 acres south of Barnett Road and east of Sanders Road.

€A 114-lot subdivision known as Fianchetto Farms, located on 29 acres north of Moore Road and east of Sanders Road.

€A 611-lot subdivision in Blocks 4 and 8 of the Saguaro Springs development, located on 148 acres north of Twin Peaks Road and west of Silverbell Road.

€A 46-lot subdivision in Gladden Farms Block 19, located on 15 acres west of Lon Adams Road and north of Tangerine Farms Road.

€A 95-lot subdivision in Gladden Farms Block 1, located on 21 acres directly south of Moore Road and east of Tangerine Farms Road.

€A 285-lot subdivision in San Lucas Blocks 2, 3 and 4, located on 73 acres directly north of Cochie Canyon Trail and east of Interstate 10.

€A 175-lot subdivision in San Lucas Blocks 5, 6 and 12, located on 49 acres directly south of Cochie Canyon Trail and east of Interstate 10.

€A 75-lot subdivision in San Lucas Block 11, located on 21 acres south of Cochie Canyon Trail and east of Interstate 10.