One reader wonders which housing bubble is in the worst shape. "Can we discuss the worst market today? There are some strong candidates such as Phoenix, Miami, Las Vegas. My immediate candidate is Phoenix with soaring inventory, punishing drought, ready buildable land available in all directions, and huge numbers of SFR’s owned by speculators. Perhaps posters could argue the case for their candidates."

Another replied, "My neighbors put their Northern Virginia house on the market today. They are retiring to Phoenix! They have already bought new construction, being built as we speak. They bought here in 92 and according to tax records are asking 2.5x orig. price."

Here is an article on the Phoenix new home market. "It only takes scanning the local newspaper advertisements to see how some new homebuilders are dealing with a softer market in 2006. Despite often putting down thousands of dollars in earnest money, more people are walking away from deals they signed during the whitehot market last year, leaving some builders with higher stocks of homes under construction."

"Combine that with a strong push to meet sales projections and it’s clear buyers jumped from a fastpaced merry-go-round last summer to the driver’s seat."

"Buyers who can’t sell their current homes in the cooling market are backing out of move-up home purchases. And investors who are worried they bought at the top of the market are also ripping up contracts. Buddy Satterfield, president of Shea Homes’ Arizona division, said the company’s cancellations over the last month are double normal rates."

"'We’re getting some homes that aren’t all the way through to completion because people haven’t sold their existing homes,' Satterfield said. 'That’s the primary driver. Resale listings have increased, so people have a lot of options out there.'"

"At Scottsdale’s Meritage Homes incentives are being offered at certain locations for homes under construction. 'The closer it gets to completion, the more interested we are in getting it sold so it can close once it’s finished, because we don’t want to have a bunch of finished unsold homes standing around,' said Larry Seay, CFO."

"The extra money can make up for having to resell the home in a slower market, Seay said. The deposits can be enough to make some money on the deal, and sometimes the home has to be discounted to sell it, he said. 'That deposit money we keep winds up kind of covering our discount,' he said."

"It’s still too early to say if fewer new homes will be sold, RL Brown said. New home permits issued in the Valley in January, the latest numbers available, were down just 2 percent from those the month before when there were 4,500 permits. 'Anecdotally, I don’t think any panic has set in,' he said."