Phoenix , Arizona ( CNN ) -- Want a sign of economic hope ? Look to a place where the housing collapse began : Phoenix , Arizona . `` We 're talking about ( home ) prices being 3 to 4 % higher than last year , which most people do n't believe because they 're used to bad news , '' said Mike Orr , director of Arizona State University 's Center of Real Estate Theory and Practice . Orr 's new report on the Phoenix market shows a direct reverse of the situation that sparked a massive housing bubble . Monthly foreclosure starts have fallen 49 % since a year ago . Home sales are up 8 % . The result ? What had been a market with far more housing supply than demand has now become a place where buyers have to act fast and beat out heavy competition . CNN Radio 's Lisa Desjardins reports on the turnaround in Phoenix . `` It 's no longer difficult to sell your house here , '' Orr told CNN Radio . `` If you price it at market , it well sell quickly . The supply situation is unusually low . '' Supply is down some 42 % , Orr estimates , from September 2008 . Top 10 turnaround towns . That is a dramatic turnaround for an area that once had a massive supply glut . According to Orr 's predecessor at ASU , Jay Butler , during the recession foreclosures hit an eye-popping 12 % of the homes in Maricopa County , which includes Phoenix . But now Orr 's report indicates that supply has been soaked up and Phoenix is again becoming a seller 's market where buyers must stand in line and move fast . `` ( The listing ) came out on the market on a Friday morning . We looked at it Friday afternoon and put a bid on it Friday night , '' said homeowner Tim Woodward of his new house . He and his fiancÃ© , Susan Rust , are combining their two families , which includes five teenage girls who will all live at home . `` So we need space , '' Rust said . She and Woodward had already lost bids on other homes and decided to put in a contract on what would become their home while sitting in the driveway after their walk-through . `` According to the neighbors , there were 11 other couples who went through this house , '' Rust said . `` So you have to be quick . '' BofA to slash mortgage balances by $ 100,000 or more . Rust and Woodward got their five-bedroom , three-bath house in Tempe for $ 290,000 , 40 % less than the asking price a few years ago . But neither the homeowners nor the experts think buyers are getting bargains anymore . They believe prices have already passed their low point , hit their natural floor and are rising again . This is not the housing market of a year , or even eight months ago . `` It 's getting very , very tough to find a real bargain nowadays , '' said Mark Stapp , a Phoenix real estate developer who also teaches at the Center for Real Estate Theory and Practice at ASU 's Carey School of Business . The classic bargains , foreclosures and bank-owned properties , are drying up . According to Orr 's new report , the number of homes reverting to lenders in the Phoenix area is down 62 % since January 2011 . Trustee sales of foreclosed properties are down 42 % . `` The market has tightened up substantially , '' Stapp said . `` In fact , I know of investors coming to town and leaving very disappointed because they thought they 'd find huge bargains and they ca n't find them . '' The question is , will this trend last ? Orr , a self-professed data addict , says the numbers indicate a fundamental shift in the market . `` If there is a major economic crisis that we have n't foreseen , things can go back to square one , '' he said . `` But this is not just a slight trend . This is something I see as being very significant . And it 's starting to accelerate . '' Follow on Twitter : @ LisaDCNN . CNN 's Susanna Capeluto and Dan Szematowicz contributed to this story .
Tempe housing market turning around , report indicates . Supply is down 40 % , says Orr of Arizona State University 's Center of Real Estate Theory . Homeowners and experts say buyers are no longer getting bargains . Mike Orr says data point to a fundamental shift in the market .