2006 was the year that the national housing market slowed. However, what happens on the national level doesn’t necessarily translate to local markets, which vary considerably from one another.

In some areas, the housing market started looking like a normal market in 2006. In other areas, it became a buyer’s market. Some areas, such as El Paso, Texas, and Salt Lake City, Utah, defied the national trend and showed sizable home-price increases in 2006. 

No one knows for sure where the market will go from here. For areas where appreciation in recent years has been strong, the best-case scenario is that home prices will advance in the low single-digit range for perhaps several years. The worst-case prognosis for the hot market areas of 2004 and 2005 is that prices might drop before they rise again.

Buyers who are buying in a soft market and who are not prepared to stay put and ride out a possible downturn should reconsider buying at this time. But, if you buy now for the long term, you could be well positioned for the next wave of appreciation.

HOUSE HUNTING TIP: Regardless of where you’re buying, the game plan is basically the same. First, carefully evaluate your financing options before you start shopping for homes.

One-hundred-percent financing and interest-only mortgages have become popular in recent years, particularly with first-time buyers. With both of these types of financing, you don’t build equity in your home when prices are flat unless you make improvements that increase the property’s value or you pay down the principal balance. So, if you were to sell after years of zero or less appreciation, you could end up paying out of pocket to close the sale.

This doesn’t mean that you shouldn’t use this type of financing. Just make sure that you understand the pros and cons of any of the mortgage options available to you. While you’re educating yourself about financing, get preapproved for the mortgage you’ll need to complete a purchase. You are in a better position to negotiate with sellers if they’re convinced that you are financially capable of closing the sale.

The next step is to learn as much as possible about local market values. This means looking at a lot of property until you understand why one listing sold for $20,000 or $50,000 more than another. Your agent can help you with this education process by providing you with information about new listings, pending sales, closed sales and expired or withdrawn listings that didn’t sell. The Internet is also an invaluable source of information about the housing market.

To be a successful home buyer in any market, you need an agent who has intimate knowledge of the local area, is a good communicator and is skilled at negotiation. In a hot market where home prices are escalating, you want an agent who can counsel you on how to win in a multiple offer situation.

In a softer market, you’re main concern is buying a property that will hold its value.

Not all homes are equal. Some properties hold their value better than others. A knowledgeable and ethical real estate agent will tell you whether a home you’re interested in will be a good investment. A good resource for an agent recommendation is an acquaintance who bought or sold recently, and who had a positive experience.

Also, in a slower, more normalized market, home sale transactions often take time to put together and more time to work through contingencies. Good communication and negotiation skills are a must, as is patience and perseverance.

THE CLOSING: Choose an agent who is up to the challenge.

Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.

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