Mike Orr of the Cromford Report (subscription) mentioned last week in a talk detailing the current Scottsdale luxury home market that with home prices rising in some areas of metro Phoenix (not luxury areas), it’s rational for banks to move more slowly on foreclosing homes in areas where prices are rising.

That sounds very rational to me but I’ve learned you should never assume banks act rationally… at least not in the short run.

Mike’s theory could be tested by comparing the price changes in a zip code to the changes in the number of ready-to-foreclose homes in that zip code. I wish I had time to check it out.