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PHOENIX -- The housing market in Phoenix may be well on the mend, but the recovery is reportedly causing new problems.

According to the New York Times, a drop in foreclosure inventory, an increase in population and a decline in underwater homeowners have been accompanied with a new set of issues.

Developers, discouraged by the high price of land and a shortage of construction workers, who left for greener pastures during the crash, are reluctant to build starter homes, the type most in demand. Prospective sellers are waiting to see if surging values will keep on climbing before they list their properties. Meantime, prospective buyers, including many newcomers drawn by new jobs in the state, are having a hard time finding a place to live.

Valley real estate agent Jennifer Beveridge said she's stopped asking how much people are willing to spend, instead asking how far they're willing to drive.

"There are still some good homes for good prices out there, but they're all far away," Ms. Beveridge said.

While the lack of starter homes on the market -- both pre-owned and new -- is nearing a shortage, the luxury market is booming while banks seek to attract those with unblemished credit with low interest rates on jumbo loans.

In metro Phoenix, the market share of luxury homes, or those priced in the millions of dollars, rose to 21 percent from 15 percent in the year ending in August, according to an analysis by Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University. Meantime, the market share for the lowest-priced homes, or those priced under $150,000, fell to 14 percent from 25 percent.

Arizona's housing recovery has been driven by midpriced homes, the report said. Homes selling between $150,000 and $500,000 were responsible for 66 percent of the homes sold in August, up 6 percentage points from August 2012.

Bruce St. James and Pamela Hughes, Mon-Fri., 9a-12p on 92.3 KTAR

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