Since the turn of the millennium, real estate has become one of the fastest growing investment sectors, not just in the United States but globally as well. But as much as we would like to think otherwise, there's considerable risk involved in real estate investing.

Picture the U.S.

For the first time in three years, the ASU-RSI (Repeat Sales Index) is showing an increase in residential prices: preliminary data for March show that year-over-year, prices for homes in the lower-price and foreclosure segments in Phoenix turned positive.

Housing prices in Phoenix continued their downward march in September, extending a record string of declines that started 19 months ago. Home prices fell 28 percent this September compared with the same month last year, according to 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.