Despite the pessimistic study mentioned in the previous post, here’s an optimistic view of the U.S. housing market from the Joint Center for Housing Studies of Harvard University.

Fortunately, sharp price declines of five percent or
more seldom occur in the absence of severe overbuilding, dramatic
employment losses, or a combination of the two (Figure 2)…
With building levels still in check and the economy expanding,
large house price declines appear unlikely for now.

This fits my view of the Phoenix market – little likelihood of lower prices as long as the economy remains strong. After the overhang of investor properties are digested into the market, prices will strengthen.