1) Economic Answer. The banks may slow down a bit on the speed of foreclosing because they expect/hope their Phoenix homes will be worth more later.

2) Organizational Answer. The banks have created and staffed, over several painful years, a bank foreclosure bureaucracy and that bureaucracy will not want to slow things down and become smaller.

Probably both factors will come into play once home prices start increasing in metro Phoenix.

Phoenix home prices weren’t going to keep falling forever. Someday, they’ll start increasing again.

I think the median Phoenix home price will start increasing in the first half of next year but I’m not sure when that fact will become conventional wisdom, possibly not until 2013.

Standard Disclaimer: Just because the metro Phoenix median home price may increase in 2012 doesn’t mean the median price will increase in your zip code or that your home will appreciate.