From Michael J Orr, Director, Center for Real Estate Theory and Practice, W P Carey School of Business, Arizona State University.

Since the beginning of July, the Phoenix-area housing market has cooled dramatically… The main change is a steep fall in demand, which we can see in the 12-percent drop in single-family-home sales activity just between August and September alone. Going forward, we anticipate a much slower rate of price appreciation than the furious pace we have witnessed over the last two years… The sudden weakness in owner-occupier demand since July is unusual and unexpected.

Active listings, not including those already under contract, went up 32 percent from Oct. 1 of last year to Oct. 1 of this year. More people appear willing to put their homes up for sale as prices rise.

If the current trend continues, supply will exceed demand by the end of the year.

The luxury market is traditionally a laggard as we see here.

The luxury market continues to perform well, thanks to the rising stock market and a big increase in the availability of jumbo loans. Sales of $500,000-plus, single-family homes grew an incredible 51 percent from September 2012 to September 2013. (emphasis added)

Detailed Report from ASU