In Phoenix, it might reach 110 degrees in the summer, but it's a dry heat with no humidity, which makes life more bearable, locals say. That's why people deal with the scorching sun and flock to the region for its relatively cheap real estate and plentiful job opportunities.

However, in the last year, while job growth remained strong, housing prices skyrocketed nearly 50%. To buy a new home in Phoenix today typically requires getting on a waiting list or in a lottery system. Those lucky enough to find a place and put down a deposit must wait eight to 12 months for the home to be built. A year ago, a typical starter home in the area cost about $150,000. Now it's more than $220,000.

While demand still remains strong in the market, prices are expected to inevitably cool down, since affordability is becoming an issue for locals. As well, investors and speculators -- those looking to make a quick buck by flipping properties -- have been driven away by anti-speculator clauses inserted by builders in new home contracts. Such investors, as was the case with many other areas of the country, were responsible for much of the run-up in prices.

But the problem is the investors in Phoenix didn't go anywhere. They still own homes that they'll eventually need to sell to realize their profits. The worry now is whether there will be a rush to the exit, with flippers overwhelming the resale market with inventory.

The number of resale listings in Phoenix jumped to 15,820 in August, up 74% from April, according to Ultimate Information Systems, a firm that provides new construction data for the realtor community in Phoenix. The firm projects listings for homes that have already been owned will jump 20% from August to September.

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