A housing report from the Arizona Republic. "Pinal County's resale housing market is steadily declining. The number of sales dropped to 720 in the final quarter of 2006 from a record high of 1,785 in the second quarter of 2005, according to Realty Studies at Arizona State University."

"In the fourth quarter of 2006, the median sales price for an existing house was $191,500, down from $220,000 in the fourth quarter of 2005."

"'In order to reduce inventories, new-home builders have been aggressively pursuing buyers through incentives such as specially priced upgrades, free pools and gift cards,' said Jay Butler, Realty Studies director."

"The number of people from California buying Valley homes has shrunk to 5.5 percent of all sales. In mid-2005, almost 14 percent of all houses sold across metro Phoenix went to someone with a California address, reports data firm Information Market."

"Many of the California buyers in 2005 were speculators enticed by the Valley's housing prices, relatively low for the West, and the subsequent wild run-ups they sparked with their demand for houses."

"If you look at the tax mailing addresses of many buyers in some neighborhoods, half of new homes were sold to Californians in 2005. In the middle of 2005, when Phoenix-area home prices had risen nearly 50 percent in a year, almost 25 percent of all houses were selling to out-of-state buyers."

"But out-of-state investors are still buying, although at a slower pace. In December 2006, 14 percent of all homes were bought by someone with a tax mailing address outside Arizona. Where are the Valley's out-of-state buyers coming from now? Texas, Nevada and overseas, real estate analysts say."

"For the many Valley home buyers and sellers who have contacted me to check to see if their cash-back deal was legal: 'There's only one absolutely legal way to get cash back on a home deal,' said mortgage fraud expert and Michigan real estate agent Ralph Roberts."

"A buyer's agent can give a portion of a seller-paid commission back to the buyer. All parties must agree on the transaction. And Roberts said that it has to be clearly disclosed in the sales document, and the lender must agree to it."

The Arizona Daily Star. "Developers are whittling and revising Downtown's paper population of high-rise condos in response to a slowing real estate market. Over the past five years, developers have proposed about 1,200 condo units...in and around Downtown."

"But a real estate market that produced the spectacle of people camping out overnight to snap up 120 Foothills condos in three hours in March 2005 has cooled considerably."

"The reconsideration of condo projects is happening everywhere. 'I can tell you that in the Phoenix area the brakes are on,' said Wayne Kaplan, spokesman for the Arizona Multihousing Association."

"Condo conversion in the Phoenix area 'really started in mid to early 2004, peaked in 2005 and ended by middle to early 2006,' said Pete TeKampe, with Marcus & Millichap. 'Tucson tracked right along with that,' he said."

"Ron Schwabe, general partner in 44 Broadway and a partner in the Depot Plaza project, said he's convinced the market for high-end condos exists, but he wants to lower his prices. 'We're going to carve it back to something you can price affordably,' he said."

"At the vacant Santa Rita Hotel, where a sign promises a boutique hotel and condo complex, the size and quality of the project are unchanged, said Lou Schulder, sales manager for Pathway Developments Inc., and he might be worried if he were opening tomorrow."

"'It's hard to live in the present,' he said. 'Right now the market has slowed dramatically compared to '05.'"

"Now, it hopes to begin demolition of auxiliary buildings by this summer, with completion at least two years off. It will be a different market then, said Schulder, and he'll have a 'potpourri of product' to sell, 'from basic little 600 square-foot studios to super-sexy penthouse lofts.'"

"'We're not going into it with our eyes wide closed. We know it's much harder to sell condos to people right now. Everybody is a little more cautious right now, but this is going to be a landmark project.'"

"Fewer new homes will be built and sold this year although home prices will continue to climb, according to a Tucson housing analyst. There were 8,579 new-home permits issued in 2006, analyst John Strobeck said. He described 2005, in which more than 11,700 permits were issued, as a 'dream year.'"

"Speaking before an audience of more than 600, he said 2006 'brought us back to reality.' 'Instead of hires, there were layoffs. Instead of too much work, there was not enough,' Strobeck said. 'So the year brought the entire industry back to the reality of having to run a business.'"

"Permits should decrease this year to 8,200, he said. But that figure 'could be a little optimistic.'"