This month brings both good and negative news for the Scottsdale and Phoenix Real Estate Market. In January, foreclosure sales represented 42% of all properties sold, compared to 30% during the 4th quarter of 2010. The main question is whether this is a temporary response to the bank moratoriums or a continuation of a market dominated by people being foreclosed on. The end of 2010 ended in an unusual set of circumstances including foreclosure moratoriums, litigation challenging the foreclosure process, and stricter underwriting guidelines.Foreclosure activity, as percentage of the total resale market in January 2011, varied throughout the Phoenix metro area such as 52% in El Mirage, 42% in Surprise, 46% in Maryvale, 38% in Chandler and 29% in Scottsdale. Another aspect of the market was the sale of prior foreclosed homes, which accounted for approximately 40% of the traditional transactions in January (4,705 sales). Due to worries about the foreclosure process, foreclosure-related activity represented 66% of the recorded activity for the month, but 63% in 2010. Median prices from January 2010 to January 2011 declined 8% year over year.Now for some more positive news-Sales are up this year from last in Phoenix by 7%, 12% in Scottsdale, 16% in Chandler, 7% in Surprise, 14% in Mesa, 26% in Gilbert-and 8% in Maricopa County as a whole.Nathaniel Karp, chief economist for BBVA Compass and one of the few banking industry economists who track conditions here, says that Arizona’s economy is improving at a solid clip. “Arizona’s economic recovery is among the fastest in the country,” said Karp, speaking to BBVA Compass clients in Phoenix, AZ this week. “And we’re seeing a faster recovery compared to a few months ago.”As reported in the Arizona Republic, Karp acknowledged challenges remain for both Arizona and the nation. Arizona’s state budget is in some pretty bad shape, including unfunded pension liabilities, he said. But he also mentioned relatively strong manufacturing gains and exports, especially in software and and the local technology sector. Other god news include an increase in hours worked for Arizonans with jobs and moderating price declines for home values here.Karp predicted Arizona’s economy would grow 3.4 percent this year alone, which is better than his projected 3 percent expansion for the U.S. On the national economy, Karp sees continuing mild inflation and moderately rising interest rates, despite sharper price increases for oil and various other commodities. He doesn’t see commercial real estate reaching the bottom until summer, but said confidence among many business leaders had risen after Congress extended income-tax laws and signaled greater clarity in regulation.Some more positive news for the valley’s economy, Intel has announced its plans for a new $5 billion facility in Chandler. The project will bring several thousand construction and warehouse jobs when they break dirt this summer, officials said. It also will create more of the higher-wage, higher-skill positions needed in a state still reeling from job losses incurred in the recession. When the Intel facility opens in 2013, about a thousand employees will be needed to run an operation that Intel executives suggest will be the most advanced high-volume semiconductor-manufacturing facility in the world.The project follows a multi-billion dollar investment the company announced in October to revamp its existing two fabrication facilities, or fabs, in Chandler. The new facility will be called Fab 42. The project will provide several short- and long-term benefits. The Greater Phoenix Economic Council estimates that Fab 42 will create 14,000 temporary jobs, including carry-over hired for jobs created by construction activity. The project also will help improve the state’s economy and job base.In summary, there is no question that uncertainty still exists in the Arizona real estate market. There are also some encouraging indicators and factors in both the Arizona economy and housing market. It is very important to stay up to speed on what is happening in the current market, and I will continue to assess the market and important local and national news that affect us here in the Phoenix valley.