The end of the downturn in Tucson is near, and the local economy will see a turnaround in the third — or even second — quarter, a University of Arizona economist says.

Marshall Vest said a collection of figures, facts, trends, hints and a touch of consumer mood led him to the conclusion.

"It's not that we're seeing a bottoming of the economy yet," he said, "but some of the economy is indicating that the worst is behind us."

Still, don't look for a bold proclamation on a specific date.

Vest's indicators, from hard numbers to the trending mood of consumers, suggest the U.S. economy is not a huge ship difficult to slow and turn, but a flotilla of rogue craft — small and large, some of which will turn around while others stay off-course awhile longer.

Economists and analysts for Tucson Regional Economic Opportunities Inc. are "seeing some life to the economy, seeing some life coming back to it, a very slow recovery," said Laura Shaw, TREO's senior vice president. "What we've been able to glean from our economists and others is: We'll trail and bounce around the bottom a lot. And it's going to be a U-shaped recovery rather than a V-shaped recovery."

Vest said there may be yet another wave of housing foreclosures. But even in foreclosures, he said, there have been positive signs.

"We're seeing that housing markets are getting a boost from the very low mortgage rates. And affordability is at an all-time record high," Vest said. "Now is a great time to buy a house," he said, pointing out that a federal tax credit of up to $8,000 is available to first-time home buyers. "So we're actually seeing money come into housing markets to buy up all these foreclosed houses."

The 162 single-family building permits issued locally in April were the most so far this year, Tucson real estate consultant and analyst John Strobeck said in Thursday's edition of The Southern Arizona Housing Market Letter." In April, Strobeck's report said, 151 new homes closed — the lowest figure in this decade. In April 2000, 408 closed, and since then, April new-home closings have ranged from a high of 688 in 2001 to 269 in 2008.

Vest said the bank "stress test" results released recently indirectly showed some positive leanings. While the stress tests told some of the nation's largest banks that they needed to raise more capital, Vest said it was heartening to see that when they issued stock to raise that cash, investors believed in the banks enough to buy it. No sharp surge expected

Despite the positive signs, we are on no steep trajectory toward economic health, Vest said.

"I think the economy here is going to lag behind the national (recovery)," he said.

Some signs on this trail have numbers attached; others are as invisible as scents. Some are instinct or emotion.

"My sense is that people are just getting tired of hunkering down and are in the process of re-engaging, doing what they do," Vest said. "Consumer confidence looks better. Retail sales look better over the last four months, since the beginning of the year."

Nationally, "financial markets and the banking system are improving, and the big federal stimulus package is poised to kick in here very soon. The stimulus checks. Withholding (tax) schedules have already been devised, and the $250 checks for Social Security recipients are in the mail."

A turnaround may be near, but all is certainly not rosy, Vest said.

"There are all sorts of things that could go wrong," he said. "There was a lot of worry with this swine flu that this could ruin things and postpone the recovery."

While that has passed, he said, the inventory of vacant houses still looms large, especially in a community where the economy was driven in large part by growth and the housing industry.

He's not alone in worrying about empty boxes cooling the recovery here.

"You get an $8,000 credit" for first-time buyers, Strobeck also stressed. "You can buy it (a home) for less than two years ago, and for 4.5 percent interest. Everybody ought to be out there buying houses. The problem is, people aren't economically set to buy houses."

Vest said he is encouraged that investors are buying homes again, "but we actually need people to live in those houses."

A new industry in Tucson would help attract people to live in the homes being sold — and would give home builders a reason to resume construction, Vest said.

"We haven't had much luck in recruiting (new industry) in the last decade," he said. "People were moving here and we had all this money floating into real estate, but the industrial sector didn't see much growth.

"One theory is, 'You get the quality of jobs you deserve,' " Vest said. We just have trouble getting quality jobs because of the quality of the work force, and that reflects the quality of education," Vest said. "They've been doing it for the last couple of decades, shortchanging education in this state."

A well-trained labor force, TREO's Shaw said, is the "No. 1 driver" in recruiting.