This sounds like the phenomenon of people getting overexcited a the auction and paying too much:
http://www.calculatedriskblog.com/2009/05/phoenix-housing-boom.html
PHX is a funny place, when I lived there in 04-05, everybody was talking real estate, and buying a house, sitting on it for a month and re-selling for $10-20k more and calling themselves investors. 44% appreciation isnt normal or sustainable… I went back down last month to get my real estate license and everyone is talking foreclosures. Canadian investors (who would have thought?!) are making weekend trips down to the valley and buying up a few homes for investment, outbidding the local investors on multiple offer REO homes. Interesting…
I’m moving down in a few months to open a satellite REO real estate office, I will be in the middle of these people once again… lol