I nominate Phoenix as the biggest housing bubble bust city in the land. Anyone second?

51,000 listings, up from 5,000 a year ago. Panic in the streets. Condo towers being mothballed. Discounts and incentives galore in the new home communities. Realtors looking for new professions. Heck, even a serial killer on the loose. And there's gotta be tons of jobless illegals now, wondering what to do now.

Even the realtor cheerleaders who were predicting price increases last month are now predicting 10% to 20% declines. Ouch! But they're still wrong. I predict at least 33% (to get back to 2004 pre-speculator levels) but more likely it'll overshoot to down 40%. If there are no buyers, and all sellers, and housing is seen as a depreciating asset (right Bob Toll?), then water finds its own level.

Here's the latest from the the epicenter of the housing bubble, Phoenix, Arizona.

The Valley's resale housing market took a hard fall in June, its worst performance for the month since 2000 and clear evidence that buyers sat out the start of the crucial summer selling season.


"It was a lot weaker than I thought it would be," said Jay Butler, head of the Real Estate Center. "I see a lot of for-sale signs staying up. I'm seeing homes that are on their third agent. Homes are getting initial drive-by activity from buyers, then nothing."

For the year, sales are down 38 percent from 2005's record levels. They also are 25 percent below 2004 sales levels.

Affordability is the dark side of the Valley's housing boom. Prices have jumped beyond the reach of first-time buyers, the rank-and-file consumers who constitute the backbone of city services and their businesses: teachers, firefighters, resort workers.

Agents and others close to the market say that prices have been falling and that buyers hold the leverage in negotiations, with some sellers offering incentives to make their properties stand out in the crowd of listings.

John Foltz, president of Realty Executives, thinks resale prices will fall 10 to 12 percent this year

Bill Ryan of Re/Max Achievers in Chandler said resale prices are down 15 to 20 percent in some areas compared with last year as the market has made "dramatic adjustments" in the past 60 to 90 days. ();