Price declines hit the Phoenix resale market for a second month in a row in September, with the drop accelerating to 4 percent, according to the latest ASU-Repeat Sales Report (ASU-RSI), released this week by the W. P. Carey School of Business.

The slumping Phoenix real estate market reached an ironic point in October where it was both "boring" and scary at the same time, according to Associate Professor of Real Estate Jay Butler, author of the W. P. Carey School's monthly resale home market report.

In his latest Realty Studies Report, Jay Butler, associate professor of real estate at the W. P. Carey School, finds that 46 percent of the home transactions recorded in Phoenix in September were foreclosures — the highest percentage level of foreclosure activity since March.

Commercial real estate matters because it's a proxy for a city's economic health. When an economy grows, companies expand into new offices, warehouses and storefronts. Vacancy rates fall, property prices rise, and developers launch new projects.

The latest realty studies report for the Phoenix resale home market showed that the typical fall downturn began as expected in August. The 8,790 sales recorded were a decline from the 10,860 recorded at the peak in March, but this August was slow even compared to August 2009.

Home prices in Phoenix have been on a welcome upswing for several months, but preliminary data for July shows no change from last July, according the W. P. Carey School's Karl Guntermann, who calculates the ASU-Repeat Sales Index (ASU-RSI).

High foreclosure rates and negative equity continue to haunt real estate markets across the nation. In fact, a new report states that about 20 percent of mortgages nationally are under water.

The small increases in Phoenix housing prices that began this spring will likely continue for only a month or two longer, then flatten out for "an extended period," said Karl Guntermann, a professor of real estate who calculates the ASU-Repeat Sales Index (ASU-RSI) at the W. P. Carey Sc

Although the number of Valley home resales for June has improved over May, there's no doubt the market remains on shaky ground.

Big picture, the Phoenix housing market showed gradual improvement overall through May, but zooming in on the various segments the picture changes, as some are still declining while others are improving — but only slowly.