From The Wall Street Journal

Foreclosures and depressed prices are still hammering the Phoenix housing market. Yet home builder PulteGroup Inc. this month had to fight off six other bidders to win land in the suburb of Gilbert.

In Arizona and across the U.S., home builders are battling to acquire land lots in preparation for ramping up home construction. While volume is tough to track, analysts report that land deals have been rising rapidly in recent months, causing land prices in some of the nation's weakest housing markets to rise for the first time since 2006.

"There's been an absolute land rush," said Gregor Watson, a partner with McKinley Partners, a California-based real-estate fund that works with builders.

That marks a big shift from the downturn, when builders halted development and liquidated land for pennies on the dollar. Now the companies are spending millions of dollars to boost their land supply, optimistic that sales will pick up once the employment picture improves. But the push is creating some concerns about whether builders could be overreaching. ...

Nationally, finished-lot prices, which saw low-single digit increases in the first quarter, are up nearly 20% from the trough, largely considered early 2009, according to a land survey released this week by housing-research firm Zelman & Associates. Lot prices in Phoenix and Southern California's Inland Empire have soared more than 60%. Sacramento, Orlando and Los Angeles are up between 30% and 40%.

Nationally, the best-located lots are commanding double what they would have a year earlier, said Greg Vogel, chief executive of Land Advisors Organization, a national land brokerage firm based in Scottsdale, Ariz.

"We're talking about a significant turn here," said Jim McNeil, chairman of law firm Akerman Senterfitt's national residential development practice that represents several public and private builders. "The builders think this thing has turned and they're making sizeable investments in both finished lots and raw land."