Despite a sea of foreclosures and bargain-priced houses for sale across the central San Joaquin Valley, home builders are still finding a reason to raise the walls and roofs on new homes.

Granted, they're building a mere fraction of the houses they once built, and they're having to throw in granite countertops, down-payment assistance and other inducements to close the deal. But amid the worst housing collapse since the Great Depression, there are still a few buyers.

"There are those buyers who still would like state-of-the-art technology, their homes wired for the latest convenience and features," said Karen McCaffrey, vice president of McCaffrey Homes. "There are some people who would prefer to personalize their home. That does not go away."

In January 2006, new homes comprised nearly a third of all homes sold in Fresno County, according to DataQuick, a San Diego-based real estate research company. Last month, they made up less than 9%.

With fewer buyers lining up at model homes, builders have throttled back on production.

Since 2008, the number of permits for construction of single-family homes in Fresno County has dropped by 61%. Last year, just 922 permits were issued, according to the California Building Industry Association.

"We've been on a historically low production mode," said Mike Winn, the association's president. Inland areas such as the Valley have been hit especially hard, he said.

And while this year looks to be another slow year, Winn said there are signs that the mood among home builders -- and home buyers -- is brightening.

A changing market

Builders say traffic at model home centers increased 30% to 40% at the end of 2011, giving them confidence that the market may be turning around.

"I think we're past the bottom," said Ryan De Young, vice president of finance at De Young Properties. "That light at the end of the tunnel is very close -- how close exactly I don't know, but that light is not as faint as it seemed a couple years ago."

De Young already has a list of interested buyers for its 37-lot Justin Pointe development opening at Willow and Nees avenues in Clovis next month, something builders have not seen in years, De Young said.

Also in March, Wathen Castanos Hybrid Homes Inc. is planning to open its 80-lot Aniston Place neighborhood in central Lemoore to meet a demand for housing from people working at the naval base and area medical centers, said Peter Castanos, director of sales.

But it hasn't been easy getting here. When the housing bubble burst, builders struggled to sell their remaining lots. Some builders pulled out of the Valley; a few, like Lafferty Homes of San Ramon, abandoned half-finished neighborhoods.

Local home builders have survived by tailoring their products and neighborhoods to certain segments of buyers or giving thousands of dollars in free upgrades.

Wathen Castanos is targeting people ages 55 and older in its new northeast Fresno development called Forkner Crest. The 36 lots are small and the houses range from 1,320 to 1,992 square feet.

"We're having success with those buyers," Castanos said. "They're looking for something to downsize into with some security and still stay in their current community."

Builders are also targeting single people, young families and first-time buyers who want smaller homes.

There is less interest in large move-up homes, prompting builders to revamp projects to accommodate smaller lots -- frustrating some neighbors who bought larger move-up homes when housing was booming.