If you were to ask veteran Realtor Jerry Cain what to do in the current real estate market, Cain’s advice is simple:

Wise people should follow the advice of multi-billionaire Warren Buffett.

“In his opinion, we have reached the bottom of the market, and now is the time to buy,” Cain said.

Renewed investor interest in low-priced properties helped to fuel resale home activity in the first half of the year. An Arizona State University study indicates that investors, driven by anticipation that home prices will rise again in the next few years, are back.

Factors pushing down median prices include large number of vacant homes and the fact that capital is available for lower-priced housing but lacking in the higher-priced bracket.

Foreclosures in Fountain Hills skyrocketed during the first half of 2008 compared with the same period last year. Eighty-two foreclosures were recorded through June, an increase of 531 percent from a year ago.

Although the percentage figure is staggering, Bonnie Puckett, a Realtor with Call Realty, said the 114 homeowners in active pre-foreclosure proceedings is more disturbing.

“I can’t say we have reached the bottom yet,” said Puckett. “Prices have come down significantly. It’s a good time to buy.”

Many homes in pre-foreclosure are in some sort of state of disrepair and require a handyman’s expertise.

“Many don’t want to buy a home that needs work. A little sweat equity can get a good deal,” observed Puckett.

Puckett works with contractors who will repair homes if prospective homeowners don’t want to tackle the task. She can connect investors or new homebuyers with contractors.

The number of foreclosure listings change daily, explained Puckett, depending upon whether a short sale is negotiated.

Her advice is to talk to a Realtor familiar with foreclosure proceedings.

“Although lenders are tightening their belts a bit, being more selective about whom they lend to, and more closely evaluating the risk factors involved, they are still lending money. With good credit history, the right documentation and a realistic game plan, there are still many financing options available,” said Puckett.

The inventory of single-family homes has been falling to around 505. Another 345 housing units (condo and town house units) are on the market, according to figures supplied by Cain.

High end OK

The sale of properties selling for more than $1 million is one category of residential sales that has remained fairly consistent, said Cain.

Of 91 residential properties currently in escrow, 12 percent had an asking price of more than $1 million, said Cain.

First and second quarter 2007 data show that there were 34 and 33 sales, respectively, for the same period in 2008.

About 47 homes under construction in FireRock will be valued at $1 million or higher, noted Cain.

“There seems to be little fear of the market in this price range,” said Cain.

The state and local allocations from the housing rescue bill, signed by President Bush, have yet to be announced.

Gov. Janet Napolitano said the state has already taken a number of steps through its Housing Trust Fund. One step is the creation of a toll-free Arizona foreclosure hotline.

The hot-line telephone number to connect homeowners with local, specially trained foreclosure counselors is 1-877-448-1211.

The new federal legislation should play a major role in helping the housing market to rebound, said Lawrence Yun, chief economist for The National Association of Realtors.

A significant feature is a tax break worth up to $7,500 for first-time homebuyers who purchase between April 9 of this year and July 1, 2009.

Yun estimated that up to 3 million first-time homebuyers could qualify for that tax break, providing a significant boost to sales.

“I think we are very near to the end of the housing downturn,” Yun said.