A neighborhood that was booming two years ago in southwest Phoenix now looks like the ground zero of the housing market.
"Foreclosed," "For Sale" and "For Rent" signs dot the lawns of this suburb, Tolleson, where 130 homes are currently on the market in one subdvision alone.
Real estate broker Sherri McBroom has the daunting task of trying to sell one of the homes.
"This is Cordes Road and you can see the auction sign at the corner," McBroom said. "There aren't a whole lot of owner-owned properties, without being foreclosed on or short-sold in the neighborhood."
In Phoenix, home values have dropped 41 percent since the most recent height of the housing market, in 2006, according to the S&P/Case Shiller Index. But in this subdivision, steep competition to sell has pushed housing prices even lower.
"It's almost impossible to sell your home," McBroom said. "If you bought it in '05 or sooner -- even '06 -- you're not going to be able to sell it for what you paid for it."
As some homeowners are finding out, they can't even sell their house for close to what they paid for it.
When Betty and Heath Hirschi bought their home in 2006 for $308,000, they seemingly did everything right. They made a sizeable down payment and took a 30-year fixed mortgage. Now, their home is worth $130,000 -- depreciating by more than half.
"It's been really tough for me. I put a lot of heart into decorating and making it a nice place for my family and to just think of it selling for such a small amount, it's really difficult," Betty Hirschi said.
The Hirschis decided to sell their home when gas prices shot up last spring and they wanted to be closer to Heath's office. Moving would save gas money on the 25-minute commute, and Betty could work from home.
But they said that trying to sell the house has been a nightmare.
"We put up a huge amount of money. We saved up to buy a home and it's all gone," Betty Hirschi said. "There isn't even an easy way to get out of our house. We're kind of stuck here."
Three years ago, at the height of the housing boom, prices rose faster in Phoenix than in any other place in the country. In this West Phoenix neighborhood, potential buyers had to enter a lottery system just for the chance to purchase a home. Now, just about every other home here is for sale.
Last Saturday, homeowners, eager to know when this mess will end, gathered in Mesa for counseling services and lectures, sponsored by the Arizona Foreclosure Prevention Task Force.
"They say housing is going to go back up. Well, at 68 years old, I don't know how long it's going to take," said Jim Gallagher, a retired plumber. "It's going to take a while. So I don't know what's going to happen."
Phoenix is not alone. Home values across the country have fallen 23 percent from their peak in July 2006, according to the S&P/Case Shiller Index. One in 10 homeowners with a mortgage is either in foreclosure or delinquent on their payments, according to the Mortgage Banker's Association.
"If we let all of these homes foreclose, it brings down not just those home prices, but everyone else's home prices," said Robert Shiller, professor of economics at Yale University.
So what's the fix?
Some economists believe banks should move borrowers into government-insured mortgages at lower rates. But many banks haven't been receptive, since they would then be forced to write off some of what the borrowers owe.