In the last month, financial markets came as close to collapsing as they have since the Great Depression, and the root of their woes was frozen credit markets. The crisis sparked several weeks of furious and futile improvisation by U.S. regulators and lawmakers.

Back in the early 1990s, the Phoenix metro area — like the rest of the country — was suffering through a profound real estate recession and house prices declined for a record 17 straight months. Like Lou Gehrig's record for consecutive games played, it was thought it would never be equaled.

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.

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.

Forecasts by the Greater Phoenix Blue Chip real estate consensus panel show that perceptions of the metro real estate market continued to deteriorate in the third quarter of 2009.

The troubled Phoenix real estate market has experienced high levels of activity this summer. With the federal tax credit ending soon, first-time home buyers have been scrambling to get into a deal. Meantime, investors anticipating a rise in prices are coming back to the market.

The ASU Repeat Sales Index (ASU-RSI) continued to decline in June, but the numbers contained positive signals that improvement is the trend in the Phoenix metro real estate market.

Foreclosed homes accounted for 37 percent of the total activity in the Phoenix metro real estate market in July — down from February when foreclosures represented 51 percent of the sales.

Although prices in metro Phoenix dropped 33 percent in May compared to May 2008, the rate of decline once again slowed, adding another month to an improving trend in the market, according to the ASU-Repeat Sales Index (ASU-RSI).

What does the trough of a real estate slump look like? Phoenix metro area property owners will have time to take a close look at this unpleasant and hazardous landscape as the real estate market slides to the bottom over the next several months — and settles in for a slow, volatile recovery.