It's a buyer's market - like never before

Dave and Karen Rysdam got a jolt when pricing their Glendale home to put on the market.

They wanted to sell in the low $600,000s, but their agent recommended an aggressive price in the low $500,000s.

Surprised, the couple consulted an appraiser, who offered similar advice. Reluctantly, they listed the house for $519,900.

"The initial reaction was, 'This is too low.' But when you take the emotions out and look at factual data, it feels like it is right given today's market conditions," Dave said.

The Rysdams are among a record number of Arizonans trying to sell their homes in today's slowed market. More than 50,000 houses and condos - of which about 95 percent are in the Valley - were listed in March, according to preliminary figures from the Arizona Regional Multiple Listing Service. A healthy market typically carries about half of that number, analysts say.

The glut of housing poses problems for an ailing market struggling to find its feet in the wake of a housing frenzy. Listings have been climbing steadily since the boom fizzled, with the total exceeding 40,000 last year. Analysts have said reducing inventory is necessary for recovery in both the new and resale markets, yet resale listings are at an all-time high.

So what is driving the numbers? Analysts point to several things:

• Sellers are unrealistic. Many are pricing homes higher than what buyers are willing to pay.

• It's partly cyclical. Sellers dust off their homes after the holidays and put them back on the market for the spring buying season.

• Investors are unloading homes. Those left over from the boom are trying to get rid of houses that are declining in value.

"They are the amateur speculators of last year or the year before," Valley housing analyst RL Brown said, noting that big inventory means price softness. "Their 'wink-wink' loan of two or three years ago is about to change into a serious burden."

Brown, who heads Home Builders Marketing, sees a few other types of would-be sellers who are helping push the number of listings higher. One is the house shopper who sees lending standards tightening in the wake of the subprime loan scandal and figures and believes he better get a loan now because he won't qualify in a few months.

Another is the casual seller just seeing what kind of offers her home may draw.

Then there is the seller who absolutely has no idea what is happening in the market and what homes are worth, Brown said.

"They are the dialed-out folks," he said.

The Rysdams don't seem to fit in that category.

Dave, director of financial systems for Honeywell Aerospace, combed his neighborhood to check out the competition. The Rysdams spent about $20,000 upgrading the house for sale.

The couple bought their house for about $205,000 in 1994 and expected to do well selling it because they didn't pull "a penny" of equity out. They are averaging a showing a day, but if they don't get an acceptable price, they are prepared to walk away from a $30,000 deposit on a new house.

"For us, the only real variable is what we get out of this house," he said. "I'm a finance guy. ... The market doesn't care how much I owe on my house. It's irrelevant to what the market will pay for your house."

Not all homeowners are of the same mind. Some agents say they are going on listing appointments only to find cranky and argumentative sellers. Agents are turning down listings because sellers won't budge from their target prices, a radical change from the boom years when agents scrambled to secure listings that sold in a few days or even a few hours.

"If you go to a lawyer or a doctor, you are paying a lot for that opinion," said Doreen Drew of Coldwell Banker Daisy Mountain. "But in real estate, they argue with you, even though they are paying huge amounts for you to sell their house."

Housing analyst Tim Sullivan of the Sullivan Group in San Diego thinks resale listings should stabilize and maybe begin to fall midsummer.

Drew said she thinks it will take most of this year to work inventory down to more healthy levels. She said more of the sellers she deals with are realistic about prices, and after six or seven counteroffers, a house may sell.

But buyers still hold the upper hand, she said. And she has seen that directly at one of her listings.

"The buyers want everything," she said. "Sellers don't want to give up everything. In this house, the seller has reduced the price $50,000. In her mind, she has done all she could do. And now the buyer wants her two favorite chairs."