The housing market in the Phoenix area is officially cooling down. Home prices are still high, but demand is not. For the last two years, prices have been going up and up in metro Phoenix, but in the last year, demand for homes has dropped about 20 percent. That is according to Mike Orr, director for Real Estate Theory and Practice at the W. P. Carey School of Business. Orr attributes the slowdown to the high prices and gun shy potential buyers, who may have been burned in recent years by a foreclosure.

“People are making due with what they’ve got,” Orr explained. “More people living under each roof, kids sharing with their parents, grandparents sharing with their children, etc., etc.”

He said interest rates are also higher than they were a few years ago, but they are still at historically low levels. The housing market’s slowing trend began in the summer, and Orr said that could lead to lower home prices in the future.