Mar. 28, 2005 12:00 AM

To outrace metropolitan Phoenix's soaring home prices, home buyers are getting in their cars and driving farther and farther out.

Developers wait in the fringe areas, sitting on relatively cheap land and building less pricey homes.

The trends have led builders and buyers straight to Pinal County.

Pinal areas like Casa Grande, Maricopa and the stretch of Hunt Highway leading to Florence now offer the most affordable new houses in metro Phoenix. Considered too remote only a decade ago, the fast-growing Pinal suburbs are sprouting new homes that are selling for at least $50,000 less than similar houses in Gilbert, Peoria and Goodyear.

And now home builders are going deeper into Pinal to create the Valley's next wave of affordable housing in Eloy and Coolidge.

"Home buyers will drive until they qualify," said land broker Dave Lords of Scottsdale-based Arizona Land Advisors.

The demand has started to drive up the low land and home prices that made Pinal so attractive in the first place.

The price of a new home in Casa Grande, for example, climbed almost 16 percent last year to reach $144,000, according to The Arizona Republic's annual Valley Home Values survey.

Five years ago new homes in the city, between Phoenix and Tucson, were selling for less than $75,000.

But the city remains affordable by Valley standards because the median price of a new home in the metro area hit $200,000 last year.

Nolita and Larry Squires recently paid $225,000 for a new 2,200-square-foot house in Maricopa, about 12 miles west of Interstate 10 and Queen Creek Road. The couple moved here from Ohio last year and were outbid on several homes closer in before finding a new KB Home. The original cost of their house was $169,000, but they added a swimming pool and several upgrades.

Home prices climbed 10 percent in Maricopa last year, and sales nearly doubled in the area.

"Our neighborhood is really starting to grow," Nolita Squires said.

Pinal phenomenon

It's a phenomenon being felt in most of Pinal County. The county has about 250,000 residents now and is expected to grow to 1 million people in less than 20 years.

The rapid growth in Maricopa County began spilling into Pinal in the late 1990s, and the tempo has quickened every year. As land prices rose in the southeast Valley, builders headed south on Interstate 10 to Casa Grande, where they could buy lots for less than half of what they were paying in Chandler.

The opening of the 2,000-acre Johnson Ranch along Hunt Highway quickly followed. Houses in the golf course community started selling for $90,000. It has been one of the country's top-selling housing projects during the past few years. Rancho El Dorado launched Maricopa as a growing Valley suburb shortly after Johnson Ranch began selling homes.

Last year, almost 17 percent of the 60,872 new houses to go up in metro Phoenix were in Pinal County, according to R.L. Brown's Phoenix Housing Market Letter. That compares with less than 10 percent in 2002.

Pinal's share of metro Phoenix's new-home market will continue to grow during the next decade if these new developments draw buyers:


• Pulte Homes' Del Webb division recently paid $87 million for 3,200 acres along the Hunt Highway, where it's planning an Anthem development that could sprout 9,000 homes.


• D.R. Horton is developing as many as 25,000 homes on 7,000 acres between the communities of Casa Grande and Maricopa in Pinal County.


• In Eloy, construction recently started on Esperanza, a 1,000-acre development that could sprout 4,000 homes.


• Coolidge began drawing its first major home builders late last year and several subdivisions are under way.

Most of Pinal's newest residents work in Valley suburbs such as Mesa and Chandler and have traded long commutes for a bigger home.

Nolita Squire works for Bank of America in Chandler, and Larry Squires drives a FedEx truck out of a Tempe facility. The couple aren't unhappy with their half-hour commutes each way to work, but it could get worse as Pinal attracts more residents.

A study developed in 2003 by the Maricopa Association of Governments, Central Arizona Association of Governments and Arizona Department of Transportation recommended developing our new transportation corridors in Pinal County to ease traffic congestion.

At the same time communities in the area are working to bring in more jobs and amenities like shopping centers so residents don't have to drive as much.

In new areas such as these, the first jobs to sprout are usually low-paying service ones, as stores, supermarkets and restaurants chase home buyers.

For Casa Grande, a bright spot was when Wal-Mart Stores opened a large food-distribution center there in late 2003 that brought 500 jobs. Pinal is expected to attract more distribution centers because of the junction of Interstates 10 and 8 between Casa Grande and Eloy.

But warehouse jobs are not the ultimate goal.

New downtown

Maricopa, for example, is building a brand new downtown and has hired Ioanna Morfessis, former director of the Greater Phoenix Economic Council, to help it attract jobs.

"A lot of home buyers in Maricopa are young professionals working in the high-tech industry," said Morfessis, who has a consulting firm. "We have the workforce to draw biotech and capital-intensive manufacturing operations."

There is little high-end office space in Pinal County. But in the development cycle, offices are typically the last projects to go in a new fringe community. They often house the highest-paying jobs.

In retail itself, the aim is to move upstream into higher-end concepts. And that's starting to happen: Valley developers recently announced plans for malls in both Casa Grande and Coolidge.

Pederson Group and WDP Partners are planning a $100 million outdoor shopping center in Casa Grande that would be the size of Biltmore Fashion Park in Phoenix. Westcor intends to build a regional mall in Coolidge next to where a new freeway is planned.

During the next two decades, Pinal's growing communities could become one seamless flow of new homes and businesses between Maricopa and Pima counties.

Land broker Nate Nathan of Scottsdale-based Nathan & Associates negotiated many of the deals for housing developments in Pinal and is already working on the next wave of projects heading toward Tucson.

"It may not be too long before the Phoenix/Tucson corridor is one big metro area," he said.