any sellers aren’t budging on prices they set based on 2005’s bidding wars and wild appreciation gains. At the same time, buyers are holding out for bargains as they watch the number of homes on the market climb, the time it takes to sell them grow, and some prices come down.

Until buyers and sellers can agree on deals, home sales and prices won’t rebound.

“It’s a much different market from a year ago,” said John Foltz, president of Phoenix-based Realty Executives. “It’s not a bad market. Buyers and sellers just need to readjust their expectations.”

Home prices are a touchy subject, particularly since they are dipping in some neighborhoods.

Builders are discounting speculative homes, making some people who bought last year worried what that does for their values. Buyers are testing sellers with lowball offers. Some homeowners eager to sell are angering their neighbors by dropping prices. And even some sellers and their agents are having trouble agreeing how much similar homes in the same neighborhood are worth.

“The housing market is confusing a lot of people right now,” said Jay Butler, director of the Arizona Real Estate Center at Arizona State University’s Polytechnic. “But the price increases last year were crazy and couldn’t go on.”

Almost all Valley neighborhoods or ZIP codes are still showing overall gains this year, according to The Republic’s Valley Home Values report. The survey tracks home prices and sales through August of this year.

Most Valley ZIP codes posted double-digit price increases for the first eight months of 2006. A few areas even showed bigger price gains this year than last.

The median price of a resale home in the central Phoenix neighborhood ZIP code 85015 was up 31.4 percent through August, compared with 29.6 percent for all of 2005. In south Phoenix, housing prices have climbed 36.7 percent, compared with 21 percent last year. In Queen Creek, the median price of a home jumped 38.8 percent this year. In 2005, the figure for the East Valley area was 34 percent.

But most Valley homeowners already have seen their home prices peak and even dip in recent months.

Home price increases from 30 to 50 percent were common last year as metropolitan Phoenix led the country in housing appreciation. But those kind of price run-ups couldn’t be sustained, real estate analysts say.

“Homeowners who think they are going to get what their neighbor did for a house last summer aren’t going to sell their homes,” said RL Brown, publisher of the Phoenix Housing Market Letter.

Valley-wide, the number of resale homes sold is down about 40 percent from last year, from 52,390 through September of this year, compared with 88,750 for the same period in 2005.The overall median resale home price for the Phoenix area dipped to $256,900 in August after hitting a high of $267,000 in June.

“The inventory of homes on the market is very high,” said Brett Barry of Realty Executives in the northeast Valley. “Until it goes down, and sellers get more realistic about pricing, I don’t see the market getting back on its feet.”

Sellers have a lot more competition, and buyers a lot more choices.

The number of homes for sale, or listings, is hovering around 50,000 in the Valley. A year ago, there were less than 20,000.

John Espinosa wasn’t planning on buying his first home for a few years but thinks he can find a better deal now. The discounts home builders are offering enticed him to start looking.

“I can save $100,000 on a new home. These deals aren’t going to be around for long,” said Espinosa, a construction worker, who is trying to negotiate to get even more off a new Buckeye home.

Last year, sellers and home builders held the upper hand as investors competed with regularValley buyers for homes. The speculators often sparked bidding wars, paying cash for houses and buying them sight unseen. But not anymore.

“A homeowner can’t just throw their home on the market to see how much they can get now,” said Margie O’Campo de Castillo of Arizona Dream Realty in Phoenix. “The key to selling a home in the Valley right now is to price it right. Some sellers aren’t getting that.”

To sell now, some Valley homeowners must drop prices, or do more work on their houses and even hire multiple real estate agents.

For the first time in the Valley, more than one real estate agent’s sign is showing up in front yards.

Neil Brooks of Century 21 Arizona Foothills recently worked with 35 others agents to hold a neighborhoodwide open house in the north Valley community of Stetson Hills.

“I have been pretty bearish on the market, but we are finally starting to see some activity,” said Brooks, who also recently paid for a party with a DJ and two free trips as prizes to entice buyers and agents to a house he is trying to sell in north Scottsdale’s McDowell Mountain Ranch.

Agents are advising homeowners to have their houses in top shape before trying to sell. Last year, fixer-uppers sold for top dollar in just days.

Glen and Serena Trainor want to move to a bigger new home in Laveen. But first they must sell their home in Avondale.

The couple are like many Valley homeowners who have signed contracts on new homes but can’t close on them if they don’t sell old ones.

The Trainor’s home has been on the market for almost four months, and their new home will be done in a few months. So they lowered their price and landscaped their yard, adding sod and flowers to attract buyers.

Housing analysts say until the resale market picks back up, home building will continue to slow because so many people are in the same situation as the Trainors.

“There was a real stalemate between buyers and sellers over the summer,” said P.J. Dean, a real estate agent with Dean-Maldonado Group. “But recently more sellers have started to come around on prices, and buyers have begun to realize they can’t get everything they want."Catherine Reagor AZ Republic

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