Subcontractors work on a Sahuarita KB Home in March. In a sign of a cooling market, some Sahuarita prices are being discounted.

Khampha Bouaphanh / The Associated Press 2006

Other articles by Joseph Barrios:

Heed law, real estate folks are warned Real Estate by Joseph Barrios : Home buyer got a scareReal Estate by Joseph Barrios: New Pulte project is its own building Deal OK'd in Rocky Point dispute Real Estate by Joseph Barrios : New service can expose your home's hidden hazard history Survey: Signs of cooling in local job growth Real Estate by Joseph Barrios : New landlord working wonders with apartments Banking scene shifting Fatality is first in parade's history Real Estate by Joseph Barrios : Wendt, mover at Long, moves on

General
CORT
WAREHOUSE/DRIVER Construction
Komatsu Equipment Co
Mechanic General
CORT
Warehouse Supervisor Health Care
Rio Salado College
PA's/Online Instructors Education
Assessment Technology, Inc
Social Studies Content Writer

Phoenix builder Beazer Homes has put off plans to move into the Tucson market, while other home builders are re-evaluating how to deal with a cooling local housing market.

The home-builder caution is in sharp contrast to housing activity over the last two years, when the price of land rose quickly and builders enjoyed waiting lists and lines of hopeful buyers leading out the door.

Officials from Beazer, based in Atlanta, and Rancho Sahuarita, an area where Beazer was looking to buy land, declined to offer details about the postponement.

"I really can't comment on that at this point just because I'm not sure where it's going to end up," said Rancho Sahuarita developer Bob Sharpe.

Although Sharpe wouldn't talk specifically about why Beazer Homes declined to buy land in Rancho Sahuarita, he said generally that new home builders moving into the Tucson market "might be a little bit more distressed" by a more volatile housing market in Maricopa County.

Jim Beck, president of Beazer's Arizona division, also declined to talk about the deal.

Still, one unfinished deal doesn't mean that Beazer is not interested.

"We are actively still looking for an opportunity to move into that market. We feel Tucson is still a strong viable market due to its close proximity to this market," Beck said in a phone interview from Phoenix. "We'll be there as soon as we find a deal that works for us."

Another Beazer official, Guy Melton, vice president of sales and marketing, said the company would not be coming here for at least the next six months.

John Neunuebel, planning director in the town of Sahuarita, said the company had not submitted any paperwork but had consulted with town officials about building there and hired a title company to prepare draft planning paperwork.

The company's abandoned plans were also covered in Tucson housing analyst John Strobeck's most recent housing market newsletter. Strobeck predicts that 10,000 building permits will be issued in Pima County this year. With Townsend Homes, Toll Brothers, Centex and Maracay Homes all entering the Tucson market within the last two years, "new builders in the market are going to have to carve out a market share at the expense of existing builders."

Andrew Schorr, a lawyer with Lewis & Roca who works with both home builders and landowners, said he has been involved in two other recent large land deals in which home builders walked away from their purchases. In one case, one builder "left money on the table" because they ended the deal after a feasibility period.

They weren't giant deals, but they weren't little, five-acre deals either," with purchase prices in the millions, Schorr said.

Some home builders are adjusting to a cooling market in other ways, said John Bremond, president of KB Home's Tucson division. While some builders are offering incentives like free pools and reduced interest rates, others are simply lowering prices.

"Frankly, there are no deals right now that we have backed away from. I can't really say, with certainty, what we will do in the near future," Bremond said. "There have been some price reductions in some areas."

As the inventory of resale homes has increased over the last several months, sale price for some homes has dropped.

In Rancho Sahuarita, for example, some KB Homes have been marked down as much as $10,000 over the last three months, Bremond said. In other areas, like KB Home's development near East 22nd Street and South Pantano Road, prices for the same models have increased as much as $10,000 for some models.

Deals falling through is a regular part of home building and land sales, said Will White, a broker with Arizona Land Advisors who works with Bob Sharpe. White said some builders are simply tugging on the reins by buying less land in a single deal or asking for more time to complete land purchases.