Sales of previously owned homes (not new home sales) in Metro Phoenix, fell in June even as prices dropped almost 6% year over year. The 5th largest drop on record according to the (NAR) National Association of Realtors. 
Resales typically perform well when prices drop as bargain hunters swoop in to get deals and steals.
The primary cause was the glut of bank-owned (REO) and foreclsoures on the market. According to to a report from the Arizona State University Real Estate Studies department.
"forecosures (in Phoenix area) were way up from the previous June - 3,275 this year from 575 in 2007.
That is 3,275 foreclosures compared to 4,565 resales. Almost the same amount.
Rising mortgage rates have also added the Phoenix | Scottsdale real estate market woes as Fixed interst rate mortage have hit highest levels in more than a year.
The FED and Ben Bernannke meets on August 5th to discuss interest rates.
They may sit and watch the new Housing rescue legislation and pause in raising interest rates. However, the slowing economy and growing unemployement may cause a move by the FED to cut rates.
Keep your fingers crossed for the FED lowering interest rates
James Wexler | Wexzilla.com , the Phoenix Scottsdale Real Estate Blog ~ 480.221.8080
James - I am surprised to hear you think the FED may cut rates in August. Everything I have been hearing points towards the rates rising in August. I hope you are right. In any case I think it is time for buyers to make their move now to avoid an increase in the rate.