PHOENIX-Vacancy rates in retail properties around metropolitan Phoenix rose during the third quarter, but only slightly, indicating that the lower interest rates and continued housing boom is moderating the impact of a slowing economy.

At the end of the third quarter, the vacancy rate for retail space was 6.77%, up only slightly from the second quarter, according to a new survey by the Phoenix office of CB Richard Ellis. Exclude the regional malls and the rate goes to 7.38%. “Surprisingly, we look OK,” says Judi Butterworth, a CB Richard Ellis broker in Phoenix. “That's still a good vacancy rate.”

The strongest Q3 market was the north Scottsdale area, Butterworth says. “North Scottsdale has just been on fire,” she says. “If they are even remotely high-end, they have to be in Scottsdale.” Scottsdale's vacancy is 4.16%, the lowest of any submarket in the Valley.