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A Phoenix Housing Boom Forms, in Hint of U.S. Recovery

In bellwether Phoenix, real estate is back. Will the turnaround spread?
Eastmark (left) is scheduled to open this summer. The Phoenix suburb of Gilbert (right)
Eastmark (left) is scheduled to open this summer. The Phoenix suburb of Gilbert (right)Photographs by Michael Friberg for Bloomberg Businessweek

At the sales office for a new development southeast of Phoenix called Waters at Ocotillo, the PulteGroup representative says she’s too busy to talk. It’s a Monday afternoon. One customer is signing a contract in her office, she explains, and another is due soon. The model for Pulte’s Yucca home is open, though. The price starts at $392,990. It’s two stories and 2,688 square feet, designed for four bedrooms and three cars. It’s stucco—as is nearly every home in every subdivision in Phoenix—high-ceilinged, and energy-efficient. The model is completely furnished, with fake iPods, iPads, and family photos. There’s a real foosball table and Whitney Houston’s Greatest Love of All streams through built-in speakers. The Yucca is part of what homebuilder Pulte calls the Cactus line; there’s also the Majesty line, which is bigger and has courtyards.

The 28-acre subdivision is one of 309 developments in the metropolitan Phoenix area with new homes for sale. It opened in December 2012, with 96 lots, and Pulte has been releasing them in batches: 16 are already under contract, and the company is raising prices. One buyer, Marc Victor, a lawyer, lost out on a home the first time. Potential buyers can bid on premium lots, and he was outbid. In the second round he offered $156,500 for a lot listed at $120,000. He’s hoping workers start pouring the foundation soon.