The Arizona Republic has these updates on the states' housing bubble. "Skeptics might question the depth of the Valley's luxury condominium market but developers in downtown Scottsdale remain confident their projects will succeed. Townhouses, lofts and condos are stacking up on the downtown skyline like chips in a no-limit poker game."

"The first 300 of about 1,500 downtown condos under construction will open as early as next month, and at least 500 more are planned in downtown Scottsdale. About 8,000 condos and lofts are planned or under construction Valley-wide. Housing analyst RL Brown has predicted that only about 20 percent of those units will be built."

"Scottsdale's condos are 'selling reasonably well, but not as quickly as promoters would have you believe,' he said. 'We're getting about one sale per week,' said Bob Flaherty, a vice president of luxury homebuilder Toll Brothers."

"Thousands of people used the non-traditional mortgages last year to afford a house in the Valley, where home prices increased nearly 50 percent from 2004. They're paying for that decision today."

"Economists say nearly 40 percent of all home loans in metropolitan Phoenix are adjustable. Making the situation potentially worse for Arizona's housing market, the number of subprime ARMs jumped by 50 percent in the state last year, the Mortgage Bankers Association of Arizona reports."

"The number of people making late payments on ARMs in Arizona climbed during the second half of 2005. At the end of the year, almost 10,000 homeowners across the state were behind on their payments for adjustable mortgages. That is almost double the rate from last summer."

"Making matters worse for those homeowners who can't make higher ARM payments or refinance fast enough is a slowing real estate market. Now, it's more difficult to sell a home quickly or make enough off a sale to pay off a home than it was during last year's housing-appreciation frenzy."

"Foreclosures in metropolitan Phoenix are already beginning to climb. 'If interest rates continue to go up and housing prices don't, more people will be squeezed,' said Elliott Pollack, an Arizona economist and real estate investor. 'When the next recession rolls around, many people are going to be set up for a very bad situation.'"

"Home builders are still dangling the incentives to attract buyers. Tne Valley builder is offering as much as $75,000 off its spec homes. DR Horton is offering free weekly maid service for a year. Free swimming pools are pretty standard these days."

"All are signs the housing market is slowing more than builders expected. But home builders still aren't hurting. Most can offer the deals and still make money because they jacked up prices so much last year."