No Boom In Arizona Housing Market?

Federal banking regulators say a rising number of U.S. cities are experiencing booming housing markets that could turn to busts, but those conditions do not exist yet in Arizona. No Arizona cities meet the FDIC's list of boom markets- those showing 30 percent total price gains, inflation-adjusted, over the past three years. Arizona homes prices rose about 30% on average from 2002 through 2004, but after inflation, the three year gain was closer to 21%.

Various cities in California, Florida, New England and along the east coast dominate the latest boom list, along with Las Vegas, Reno and Honolulu. Stephen Happel, an economics professor at ASU, warned that any sudden increase in long-term interest rates could significantly curb demand.