Last Wednesday on KJZZ, local real estate experts talked about whether the Phoenix-area real estate market is nearing, or at, the bottom.  One sign that we’re at the bottom -- or at least that the downward trend is losing momentum -- is the rising sales price per square foot of homes in the metro Phoenix area, according to fellow Realtor John Wake.  Plus, he added, in April more homes were sold in Phoenix than ever before.

ASU finance professor Tony Sanders was less optimistic that we’re at the bottom of the real estate downturn, but he did say that if job losses stabilize, and banks continue to do short sales and auction foreclosures to get real estate assets off their books, then we will see a turnaround sooner than later.

What that turnaround will look like is another question.

Let’s hope it looks like a V -- a fast recovery.  An L would be the worst -- that would mean the economy has set a new, lower level of economic growth.  Earlier this month the Arizona Republic detailed V-shaped and L-shaped recoveries, as well as U- and W-shaped turnarounds.

V: Fast recovery

“This is the most common type of recovery since World War II and the most preferred. It means the economy hits bottom and recovers fairly quickly.  Because of the large number of unsold homes, the number of unemployed people and the still-uncertain effects of toxic mortgages on bank finances, economists don't expect V to be the shape this time.”

U: Slower recovery

“Economists generally believe this will be the shape of the recovery from the current recession. We could bump along the bottom for a while, perhaps into late 2009 or 2010. This also could be what is termed a ‘jobless recovery,’ because skittish businesses may be afraid to hire.  Scottsdale economist Elliott Pollack has even stretched out the bottom of the U, making it look more like a saucer.”

W: Double downturn

“Usually, recessions come several years apart. But, in the 1980s, the country experienced a W recovery, with recessions a year apart. The economy first suffered a six-month contraction from January to July 1980, and then, a year later, went into a 16-month recession from July 1981 to November 1982. They were prompted by a 1979 revolution in Iran that caused gas prices to skyrocket and then a series of Federal Reserve interest-rate increases that severely depressed home sales.”

L:  A new “normal”

“In an L-shaped recovery, the economy collapses sharply, similar to what happened in September, when the collapse of Lehman Brothers brought financial markets to their knees. Credit remains tight.  The L recovery brings no recovery. The country has to adapt to a ‘new normal.’  This is what happened to Japan in the 1990s, after an investment bubble burst.”

What do you think?   Are we at the bottom?  What will the recovery look like?  Click on the “Comments” link to join the discussion!