The lights in the housing market in Phoenix suddenly became very bright, according to a report from Keefe, Bruyette, and Woods (KBW) that HousingWire picked up. Following discussions with home builders, banks, and developers, KBW says new home building permits are expected to rise 50 percent in 2012 , as resale inventory falls to less than a two month supply. Foreclosure activity has fallen 50 percent year-over-year, as the percentage of REOs and short sales dropped to 45 percent from a high of 70 percent last year. Phoenix builders saw home prices rise 20 to 25 percent March 2011 to March 2012. In August of 2011 MHProNews.com noted Arizona had the third highest foreclosure rate in the country, right behind Nevada and California.

(Photo credit: PhoenixHomes)