After they lost their home, Bob and Rayo Guerro rented a new place in nearby Twelve Oaks, one of dozens of partially built out housing developments in the greater Phoenix area. They are now buying the house in an owner-financed deal from a builder desperate to get something back from his investment. It's actually an upgrade for the Guerros -- if you disregard the fact that parts of the development look post-apocalyptic. Fifty yards from the entrance, for example, an abandoned brand-new house rises from a field of vacant lots and toppled real estate signs. On the front porch, instead of a rocking chair, there's a dried-out tumbleweed.

This may very well be a vision of the future of Phoenix -- especially its outer-edge communities. Average prices have dropped nearly 50 percent, but there are even better deals out there -- one broker told the Arizona Republic that he just put a $119,000 price tag on a home that sold for over $400,000 a few years ago.

Gammage believes that the low prices will draw people back and "will get us back to the normal Arizona growth cycle before this last boom, when about half as many houses were built." Arizona has recovered before, after being hard-hit by the savings and loan crisis of the late 1980s. There were a lot of foreclosures then, credit tightened and growth slowed, especially on the fringes. Back then, however, foreclosure notices were only being issued at a rate of about 1,000 per month. In 2008, the rate was 10 times that or more.

And even if all the cheap houses currently on the market -- there are more than 80,000 homes for sale in Phoenix right now -- were bought up, then what? The sale of those homes alone can't kick the old growth cycle back into gear by itself, because it won't create any new construction jobs. Without new high-paying jobs and easy credit, the purchasing power is just not there to inspire new construction.

Ed McMahon believes that many now-abandoned neighborhoods will repopulate as prices continue to drop. But the movement back to the fringes will be tempered. As the recession ends, gas prices will climb again. When you have to drive to work, to the store and to everywhere else, that cheap home out in the exurbs doesn't seem so cheap. "People aren't looking enough at the combination of transportation and housing costs," McMahon says. "Any short-term gain in lower prices is going to be offset by the long term."

But it's more than just simple economics, McMahon says. "The collapse has really changed the way people think about housing," he says. "We saw it as the quickest way to wealth. Now, that's not the case." People may forget about the American dream of home ownership, and just rent a place -- a loft in the city, perhaps.

That's how Leinberger of the Brookings Institution sees it. He says that we're seeing the swing of the pendulum back towards the urban core after 50 years of swinging outward. Downtown Phoenix and Scottsdale -- an upscale suburb near downtown -- will weather the downturn fine, as will any other areas that manage to fall along the line of Phoenix's brand-new, and unexpectedly popular, light rail. Others "may not recover," he says.

For those places, Leinberger envisions a grim, downward spiral. As prices remain high in the urban core, it will force lower income folks out into the exurbs, where supply is high and prices low. They may rent McMansions that have been divided into duplexes, or buy houses cheap enough that they're not inspired to maintain the property. Property tax revenues will fall with property values, and local infrastructure and government programs will deteriorate. These can all add up to create a slum, a fate that befell Maryvale -- Phoenix's very first suburb -- as the exurbs flourished.

Back at Radiant Church, Jose Hernandez, one of the few men waiting in line for help, explained that he had been looking for a job for months, without luck. As the housing market collapsed, so did the larger economy. The homebuilding industry has shed 80,000 jobs in Phoenix alone. Tax revenues have shrunk, the state is facing a $3 billion budget shortfall next year and area schools recently laid off hundreds of workers. Social programs are losing their funding.

While Hernandez spoke, the food bank ran out of goods, so Pastor McFarland had to run to Costco for more. Carrie Fay Amaro, a church employee, explained that Radiant has always had an informal food bank. As the economic crisis deepened and more people started coming to the church for help, they called the city to figure out where they should refer those who need serious help. The city replied that the church " ‘is all we have,' " Amaro says. The church soon had more needy people than food.

On that day, back in November, 200 people lined up for help at the church. Since then, the church has helped over 16,000 individuals. In order to keep supplies up, they've had to make regular appeals to the congregation. "Jesus cared about the poor," announced one of the church's huge television screens after a sermon in November. "Do you? … So, what are you going to do about it?"