Glen Creno
The Arizona Republic
Mar. 28, 2007 12:00 AM
Permits for new-home construction are on the rise in Maricopa and Pinal counties, jumping 26 percent in February compared with the previous month and building on two straight months of gains.

Builders pulled 3,630 permits for new construction last month, according to analyst RL Brown, publisher of the Phoenix Housing Market Letter.

The total is still below what it was the same time last year, when the Valley was beginning to wind down from a housing boom in which record demand distorted yearly comparisons. And Brown cautioned that 18 percent of the February permit total was for condos. That means the crucial single-family-home market still has some work to do in its recovery.

Yet the increases could indicate that builders are finally making a dent in excess inventory and are looking to start new construction, Brown said. Excess inventory, both new and resale, has been one of the drags on the local housing market, and analysts have said clearing it is key to any correction.

“Inventory is not stagnant,” Brown said. “Permits have been down for so long. Obviously we are selling inventory.”

The skyrocketing prices of the housing boom scared away buyers and many walked away from contracts, leaving some builders with cancellation rates of 30 to 40 percent. Builders were faced with getting rid of those speculative, or “spec,” homes. Brown said the spec inventory is falling as more builders buckle down.

It’s unclear exactly how many spec homes are on the market. Some analysts say the number could be more than 10,000.

Doug Fulton of Fulton Homes said his company will pull more than 50 permits to get started on a new community in Gilbert. Otherwise, he said, Fulton will be mainly selling down a spec inventory of about 280 houses.

Fulton hopes the surge in permits isn’t just big public home builders cranking up local production so they can book 2007 sales. Builders would need to pull the permits now to have the houses built in time to sell before this financial year ends.

“I would like to see permits go down,” he said. “What are you doing? You are just generating more inventory. . . . I don’t like to see permit increases any more than I like to see additional homes listed on the MLS (multiple listing service). It’s a supply-and-demand issue.”

Brown’s report also noted that the number of closed sales was the lowest since May 2003. He said most new houses being sold in the Phoenix area these days are spec homes. Falling sales could mean either reduced demand or that a lot of the spec inventory has been sold.

Developer has another building being constructed

Ginger D. Richardson
The Arizona Republic
Mar. 16, 2007 12:00 AM
A developer who has already made his mark in downtown Phoenix with one condominium tower is now proposing a 32-story residential project in the heart of the city.

The $100 million development, called Omega, would be at Second Avenue and Adams Street, behind the Orpheum Lofts, and would be the third urban housing high-rise in Copper Square.

It is the brainchild of Chicago native turned Phoenix resident David Wallach, who is taking an active role in the redevelopment of Phoenix’s core.

Wallach, principal of W Developments LLC, was the first to take a chance on downtown’s urban living appeal when he announced plans to build the 165-unit Summit at Copper Square condominium tower in 2004. Today, the project, next to Chase Field, is 85 percent sold, and its first residents won’t move in until this summer.

Wallach also is one of a consortium of local businessmen who recently announced plans to create a blocks-long entertainment district along Jackson Street, on downtown Phoenix’s southern edge.

That explains why Wallach is bullish on the need for residential housing in the heart of the city, despite lingering concerns about the health of Phoenix’s real estate market.

“The premise that the housing market is soft in downtown is not the right place to start,” Wallach said Tuesday. “The right product in the right neighborhood has a really good chance of succeeding.”

Wallach said he hopes to break ground on Omega later this year and said the tower could open in 2009. It features one-, two- and three-bedroom units, starting at about $400-plus a square foot. That would put the smallest, 750-square-foot residences in the $300,000 price range.

Penthouse dwellings are as large as 2,400 square feet, meaning that they would likely be offered at close to $1 million.

Each of the 214 units will contain amenities such as marble baths, granite countertops and all-wood cabinetry. The tower itself will boast a 12th-floor pool, a rooftop party and meeting rooms, workout facilities, six floors of parking and ground floor retail.

Wallach hopes to fill that space with a restaurant.

But he believes one of the project’s biggest selling points will be its location. The tower is across the street from the Orpheum Theatre and close to Phoenix City Hall. It is also within walking distance to many of downtown’s biggest draws, including Dodge Theatre, US Airways Center and Chase Field.

“It’s all location, location, location,” Wallach said. “The sightlines from every part of the building are spectacular.”