Phoenix, now the fifth largest city in the United States, could be the poster child for metropolitan areas where a bursting residential housing bubble has created economic discord.

Since the turn of the millennium, real estate has become one of the fastest growing investment sectors, not just in the United States but globally as well. But as much as we would like to think otherwise, there's considerable risk involved in real estate investing.

Picture the U.S.

For the first time in three years, the ASU-RSI (Repeat Sales Index) is showing an increase in residential prices: preliminary data for March show that year-over-year, prices for homes in the lower-price and foreclosure segments in Phoenix turned positive.

Housing prices in Phoenix continued their downward march in September, extending a record string of declines that started 19 months ago. Home prices fell 28 percent this September compared with the same month last year, according to the Arizona State University-Repeat Sales Index (ASU-RSI).

Activity in the Phoenix real estate market dropped between June and July, during the summer season when sales are usually up. The reason is that foreclosure-related activity fell once again — dropping below 30 percent for the first time since 2009.

The summer resale season in the Phoenix real estate market has been brisk, with about 10,500 single-family homes changing hands in June. And, for the fourth consecutive month, foreclosure-related sales as a percentage of the total market have fallen.

The volume of home sales in May in the Phoenix market was about on par with the rest of this spring's resale season, although the percentage represented by foreclosures continued a modest decline.

The traditional spring resale season is in full swing in the Phoenix market, with 10,265 homes recorded sold in April. That's about 900 fewer than March, but level with April 2010.