Read or listen: A report on real estate market conditions in Phoenix shows that foreclosures represented 43 percent of total transactions in February. That’s a significant increase from the 30 percent of the closing months of 2010, when many banks put a pause on foreclosures as procedures were reviewed. Jay Butler, associate professor of real estate  and author of the W. P. Carey School’s Realty Studies Report, says that economic uncertainty will continue to bedevil the market, which remains dominated by investors rather than owner occupants. Butler met with Knowledge@W. P. Carey to talk about the data behind the report, and what may be ahead for Phoenix.

January brought an uptick in foreclosures in the still-troubled Phoenix real estate market — discouraging words after the drop in foreclosure-related activity in the waning months of 2010. But is it a new trend? Jay Butler, associate professor of real estate at the W. P. Carey School of Business, says the increase may be the result of lenders terminating the various moratoriums that were in place last year. With the numbers moving ahead and then back like dancers doing the cha-cha, recovery will come in baby steps, Butler said.

Since 2008, 11 percent of the single-family homes in Maricopa County, Arizona, have been through foreclosure — 4 percent in the last year alone. And with moratoriums on foreclosures ending, the new year is expected to start with an uptick in the number of property owners losing their homes. Associate Professor Jay Butler, author of the monthly Realty Studies Report, has looked at the preliminary census numbers. They show that actual population growth in the last decade was slower than projected. This raises questions about the amount of time that will be needed for the surplus housing in the Phoenix market to be absorbed. Arizona historically has relied on in-migration and construction to power economic growth. Looking ahead, Butler says that the state faces serious questions about this reliance on population. And he suggests that across the nation as well as in the West, the American Dream itself is up for review.

Once the envy of most of the nation, Arizona’s real estate industry has become a cautionary tale, and the new story of recovery is one of fits and starts. Knowledge@W. P. Carey consulted experts at the W. P. Carey School and elsewhere to take a long look at the 2010 market in Arizona and the nation. Like the rest of the country, Arizona is experiencing another period of declining prices, and the state is still a front runner for foreclosures. And similar to other states, Arizona is burdened with excess supply in both residential and commercial properties. The last months of 2010 showed signs of slow job growth, but not yet enough to generate the energy needed to pivot the real estate industry for a fast rebound.