No one quite knows how to interpret the sales due to the impact of foreclosures. However things may have approached, some say hit, bottom. Reports from brokers in Phoenix, one of the hardest hit areas in the country, are that builders are realizing they are out of lot inventory. They are about ready to get back in the market buying improved lots but in numbers of 15-25 lots at a time with rolling options to buy another 15-25 as the newly built homes are sold. They are interested only in entry level homes which are more reasonably priced.

In fact in the early 2000's when we had something like 25,000 new starts per year, approximately 80% of the new houses in Phoenix sold for less than $200k. By 2005 the average price of a new home had risen to $250K (up from $150K average in 2001) and we all knew we were in trouble.

This new demand (15-25 lots per builder at a time) is a far cry from what we were doing but is certainly headed in the right direction.