Here’s Catherine Reagor’s article in the Arizona Republic from a couple of weeks ago which compared the current housing bust to the previous one in the late 1980’s and early 1990’s.

During the last real-estate collapse, housing prices dipped less than 5 percent. So far Valley home prices have fallen almost 40 percent from the high reached in mid-2006.

Residential foreclosures continue to climb to new monthly records. Resale of foreclosure homes taken back by lenders now accounts for half of all home sales.

The larger state and national economy also is suffering, which only makes matters worse for housing and growth. Unemployment in Arizona is at a 15-year high. The state is now ranked 48th in job growth after being in the top five among states for the past decade.

Arizona’s population growth is slowing because there are fewer jobs and because people can’t sell homes in other parts of the country to move here. The state is expected to grow by only 1.2 percent this year, the slowest rate since the early 1970s. Most of the growth is coming from births outpacing deaths in the state, instead of from people moving here.

“We are in uncharted economic territory now,” said Marshall Vest, chief economist with the University of Arizona. “The last real-estate recession wasn’t nearly as deep.”

And she ends with this.

Real-estate analysts and economists predict that the Valley’s real-estate market will continue to slow through 2010, with no significant increase in home prices or sales until 2012.

That is certainly a realistic expectation for metro Phoenix as a whole, however, I expect that some areas of metropolitan Phoenix could begin turning around this year.

On the other hand, I hear from someone at HomeSmart Real Estate, the largest real estate brokerage in Arizona, that February closings are disappointing so far. That is not a bullish indicator for the critical March-May home sales high season.

In a couple of months we will have a good idea how 2009 should play out for Arizona home sales.

Although this year the rapidly changing government housing policies add another level of uncertainty to the mix.