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.

From seasoned real estate writer Steve Bergsman comes this message: Proceed with caution, be patient and realize that there are many kinds of real estate markets — each with particular potentials and pitfalls.

Sales data from March indicate that a trend change in housing prices might be underway in the beleaguered Phoenix metro market.

An anemic economic recovery will begin at the end of the year, but don't expect the pain to end anytime soon.

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.