Another long-term problem, they said, is the large number of struggling borrowers trapped in high-end homes for which there are virtually no eligible buyers.
Perhaps the most troubling long-term prediction is that certain pockets of less-desirable residential development simply will not recover.
Trouble by the numbers
Home sales and prices began to stall in mid-2006, but the collapse of the metro Phoenix market gained momentum in the latter half of 2007, when a disturbing trend emerged among recent homebuyers.
There was a sudden jump in mortgage-loan defaults, which came as no surprise to those aware that constant home-value appreciation had been essential to the viability of certain loans being approved for first-time buyers.
Popular mortgages issued during the housing boom were adjustable-rate loans structured to start off with lower monthly payments that would increase over time.
Loans were approved based on borrowers' ability to make the lower, initial payments. It was assumed that by the time those payments increased, the home would have appreciated enough to allow the borrower to either sell or refinance.
But when home values stopped going up, that exit strategy evaporated.
Sales began to slow, then stall.
When the number of pre-foreclosure notices issued to single-family homeowners in Maricopa County nearly doubled to 16,911 notices during the last six months of 2007 from 9,319 notices during the first six months of the year, the problem loan products were yanked from the market, but the damage was done. Home foreclosures skyrocketed to record levels.