Phoenix housing bubble deflation update

The number of homes for sale has gone over 40,000 (at last check it was 37,217 on March 6). Home builders are offering incentives like a free car or free upgrades (like granite counters, flooring, and cabinets) in order to avoid reducing prices, but price reductions are inevitable. And when price reductions occur, those who've already signed contracts at higher prices will be more likely to walk away... the rational response when an asset class you want to buy is deflating in price is to wait as long as possible, because the deals will only get better. (That's why I'm content to live with year-or-more-old computer technology; my last upgrade for a home system was to buy somebody else's used system.)

More at Ben Jones' Housing Bubble Blog.