Could declining real estate values in the Southwest be the canary in the cage? As suggested in this article, imbalances might be occurring in the real estate market in Phoenix AZ. Demand has been much weaker since July 2013. The slight recovery in demand that had been  developing over the last two months dissipated again in May. While move-up owner occupiers and  second home buyers are starting to compensate for the departure of investors, activity by first time home buyers is unusually low. At the top end of the market sales of single family homes over $500,000 grew 1% over May 2013.Sales of single family homes below $150,000 fell 37%. This fall was partly caused by the lack of distressed supply, but mostly by the reduction in demand from investors. To connect this to the Federal Government impeding state and local authorities and their attempts to rein in illegal immigration might be a leap at this point. But it does not require too vivid of an...(Read Full Post)