by Calculated Risk on 8/18/2014 08:45:00 PM

From Nick Timiraos at the WSJ: In Phoenix, a Realty Check as Market Moderates

Among the cities most battered by the 2006 bust, Phoenix was the first to snap back in 2011. Prices, off by 56% from peak, then rebounded sharply, trimming that drop by a third. The number of homes in some stage of foreclosure has fallen to about 4,300 homes today from more than 50,000 four years ago.

Now, prices and sales are cooling off. Inventories of homes listed for sale have climbed to their highest level in three years while the number of houses sold in June fell 12% from a year earlier. ...

As the foreclosure boom that fueled much of the recovery fades, income and population growth are reasserting themselves as drivers of the housing market in places such as Phoenix. Meanwhile, lingering scars from the bust are playing out as some of the country's hottest housing markets struggle to pass the baton from bargain-hunting investors, who typically pay cash, to traditional buyers with mortgages.

The Phoenix market is slowly moving back to normal. There is still a ways to go until traditional buyers feel confident, but the sharp decline in distressed sales a clear positive.

Tuesday:
• At 8:30 AM ET, Consumer Price Index for July. The consensus is for a 0.1% increase in CPI in July and for core CPI to increase 0.2%.

• Also at 8:30 AM, Housing Starts for July. Total housing starts were at 893 thousand (SAAR) in June. Single family starts were at 575 thousand SAAR in June. The consensus is for total housing starts to increase to 963 thousand (SAAR) in July.