The Phoenix real estate market slowed down in the last two months of 2013, and that could be indicative of what's happening in Tucson and the rest of the state, a housing expert said.

A report from the Arizona State University's W.P. Carey School of Business shows the price increases since September 2011 have been slowing, and the sale and supply of housing is also declining.

The report reflected market decreases that may also be happening in Tucson, the rest of the state and southern California, said Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business.

“I think the trend that we’re seeing is true of the whole of the Southwest and California and the Pacific Coast. It may not be true of the other parts of the country because real estate is very much a local thing," Orr said.

It may be the first sigh of regional housing market slowing, he said.

"Generally speaking, the southwest corner of the country does tend to move in sync," he said.

The slowdown in the Phoenix housing market may represent a natural stabilization following the recession, he said, and cautioned sellers.

“It’s a healthy market, but it’s one in which sellers need to understand that they don’t really have the negotiation edge that they had last year when they could often pick and choose between multiple offers," Orr said.

The report showed residential housing investment activity and new construction numbers also dropped, but the demand for rental homes remains high.That might be because the millennial generation is old enough to seek independent housing, he said.