But in a time of tightening credit nationally, the would-be buyer couldn't secure financing and the contract expired. Mills expects a new, $119,900 deal on the roughly 900-square-foot bungalow to close soon and attributes her success to correct pricing.

I looked at other houses that were $5,000 to $7,000 above, said Mills, 50. Theres just a ton of them out there, so by pricing them just under, youre definitely going to get the exposure.

While the Spokane housing market is cooling from a few years ago, its still robust compared with the declines in prices and sales seen in much of the rest of the nation.

A new federal report says Spokane was among the 20 markets that had the greatest real estate price appreciation in 2007, with the price of a home bought or refinanced here last year rising 7.12 percent.

Nationally, home-sales prices dropped 1.3 percent during the last three months of 2007 and 0.3 percent during the year the first annual decline in 16 years according to the Office of Federal Housing Enterprise Oversights index. By another measure, U.S. home prices dropped 8.9 percent in the final quarter of 2007 compared with a year ago, according to the Standard & Poors/Case-Shiller home price index released today. That marked the steepest decline in the indexs 20-year history.

Given the national picture, making the top-20 group is a pretty good list to be on for Spokane, Washington, said Randy Barcus, chief economist for Avista Corp.

Local experts said while the rate of appreciation has slowed and the number of homes sold has decreased, statistics indicate values are holding their own.

A recent report from the Washington Center for Real Estate Research at Washington State University, for example, found the median resale price in Spokane County increased 7.9 percent in the fourth quarter, to $194,200. The number of homes resold fell 31 percent compared with the fourth quarter 2006.

Credit crunch

 Many experts say the national market wont hit bottom for another year, and only after excess inventory is sharply reduced and credit markets improve.

Currently, only the most creditworthy qualify for mortgages. Lenders nationally began keeping a tighter leash on credit when interest rates on adjustable-rate mortgages climbed, declining values ate into equity and owners started losing their homes to foreclosure at a fast pace.

The Coeur dAlene market recently made Mortgage Guaranty Insurance Corp.s list of at-risk or restricted markets, meaning loans secured by property there must follow special underwriting criteria.

Coeur dAlene saw lots of construction over the past five years, Barcus said.

When we have an inventory adjustment time, a credit crunch, the faster-growing areas are going to be affected more, he said. I see this slippage in the fourth quarter to just be sort of a normal adjustment.

Fears of a national recession prompted by the subprime loan crisis do have a flip side. Mortgage loan rates have dipped as the Federal Reserve slashed interest rates in an attempt to spur the economy.

In Spokane, it took about six months for intensive-care nurse Randy Fleming to sell his 2002 four-bedroom home near Wandermere Golf Course. While he had to lower his asking price and switch real estate agents to get that sale, the tradeoff was that he obtained a much better rate on the loan for his new home than would have been the case six months ago, said Fleming, 38.

We got an exceptional rate with that. I guess timing is everything.

Job growth

Like many cities on the list, such as Huntsville, Ala., and Billings, Spokane had home-price appreciation last year largely because of job growth, Barcus said. We are pretty sure many of the people who are moving here from other places are coming with equity from those other places when they take these jobs, Barcus said.

New state data released today, however, show Spokanes unemployment rate has climbed from a low of about 4.1 percent in October to 6.2 percent in January. The statewide rate was 5.2 percent last month, according to preliminary numbers. Also, people in harder-hit markets may have a harder time selling homes to move here.

Mills relocated early last year from the Phoenix area, which saw a 3.42 percent price depreciation in 2007. An investor bought her house there for $340,000.

If we would have sold it a year earlier, we would have gotten about $100,000 more for it, she said.

Consumer choices

What happens in the local real estate market in the future will depend largely on what consumers do, a difficult thing to predict, said Glenn Crellin, Center for Real Estate Research director.

Many potential buyers reading the press, listening to the electronic media have been scared off on stories that are based primarily in markets that are doing less well, telling them the real estate market is in deep trouble, Crellin said.

Mills might list her current home here within a year, if she thinks she can get back what she invested.

Coming here, I think the housing prices are still a little bit under the Phoenix prices, she said. Its still a good area to buy and sell a home.

Fleming, the nurse, echoed that sentiment: Were having a normal market, and people just need to do appropriate things and have a little patience.