The Tucson area is once again seeing activity in the custom homebuilding market, which was almost nonexistent during the housing crash.

And, the $150,000 to $250,000 lot market is the hottest as baby boomers begin downsizing from spacious homes to something more manageable.

“Upsizing life by downsizing a home is becoming very popular among the baby boomers and the residential land market is capitalizing on this trend,” said Sue Hill, a land broker with Long Realty. “These land buyers are keeping the semi-custom builders busy with diversifying into a market where they can build one of their models on a client’s own lot.”

In February and March, 12 percent of permits issued were for custom homes.

“Custom home activity has been particularly solid in the last six months,” said housing analyst Ginger Kneup, owner of Bright Future Real Estate Research. “We are even seeing the return of some speculative custom home building which is a great sign of builder confidence.”

She said the bulk of custom homes are concentrated in the high-end areas of Rancho Vistoso and Dove Mountain as well as the northeast areas of town and the southeast Rincon Valley.

While not as active, the luxury homesite market with lots over $400,000 had some significant sales this past year including a $525,000 lot in Ventana Canyon, a $620,000 lot in Pima Canyon and an $825,000 lot in Stone Canyon.

“Spec homes are slowly coming on the market, but they tend to be smaller than years past — bigger isn’t necessarily better,” Hill said. “We are dreadfully in need of new homes in the Catalina Foothills and I think with the increased land activity we’ll soon see more new custom home construction.”

Tim and Jain Barrett, owner of general contractor Desert Earth and Wood, complemented their business with remodeling work during the downturn and are relieved to see renewed interest in custom homes.

“Most customers come in with just an idea in their head,” Jain Barrett said. “We work closely with the customer from design to build.”

The company builds with insulated concrete form — blocks made from recycled foam — stabilized with rebar and filled with concrete.

“It makes an incredible shell,” Tim Barrett said. And custom polished concrete floors feature hydronic radiant floor warming that use hot water flowing in thin tubes under the floor to warm the house.

Recent customers include a young man who had a family lot in an older barrio and wanted to build where he grew up, to a couple with land out in the desert who wanted an oasis.

“Things are definitely rebounding,” Tim Barrett said.

Hill, who has specialized in land sales for 35 years, is pleased to see the niche market return to the Tucson area.

“It has been agonizing to watch this market just kind of bump along the bottom, fighting to recover with me becoming more of a psychiatrist than Realtor in trying to help sellers cope with their losses,” she said. “But … the custom land market once again has a lively beat.

“It came to a screeching halt in the bad times,” Hill said, “and is now starting to come back.”

Contact reporter Gabriela Rico at grico@tucson.com.