Phoenix metro real estate prices declined 37 percent in February compared to February 2008, but preliminary data for March and April show that the rate of decline may be slowing.

Arizona real estate markets tend to swing wildly. During boom periods, home prices accelerate precipitously, but when the bubble bursts, residential values sometimes slink all the way back to the price level at the start of cyclical upturn.

The 13 economists who track the real estate construction industry for the Greater Phoenix Blue Chip Economic Forecast are projecting that the metro area's residential market will bottom out in 2009, however down times will continue on for the multi family and commercial sector.

Malaise in the economy is slowing down the arrival of relief for Phoenix real estate and lengthening what is already a record-breaking run of declining prices, according to an analysis of the Arizona State University-Repeat Sales Index (ASU-RSI).

Although nonresidential building held up longer than residential activity in the current recession, the nonresidential downturn now has started and is expected to continue into 2010. The timing of the rise and fall of these two construction categories differs.

Real estate expert and finance Professor Karl Guntermann has been predicting for a long time that the decline in Phoenix area home prices would probably bottom out by the end of 2008.

The extreme appreciation that thrilled Phoenix area residents who bought their homes in the period just before the run up is gone — all gone. But the downward slide isn't over yet.

Luxury homebuilder Geoffrey Edmunds says the Phoenix market is suffering from a troika of price correction, financing troubles and oversupply — and has yet to hit bottom. But when it recovers, the market will look different, he says.

If the federal government really wants to stem the financial crisis, it must decisively address the huge — and still growing — number of delinquent and soon-to-be-delinquent mortgages, according to finance and real estate Professor Anthony Sanders.

In the late 1980s home prices in Phoenix declined for a grueling 17 straight months before bottoming out in the early 1990s. That downturn pummeled the savings and loan industry, and it set the record for length.