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updated 5/15/2006 12:37:04 PM ET 2006-05-15T16:37:04

The housing boom has ended.

But that doesn't mean a real estate bust. In most markets across the country, home sales continue at a brisk pace. And in some metros, prices are rising even as fewer houses are selling.

"It's not like we're seeing this market go from red-hot to icy cold," says Mark Vitner, senior economist with Wachovia Corp. "It's still pretty good when you look at the total number of sales."

The numbers show housing sales in many markets have slipped from the hot pace of the past few years. Those record years were driven by rock-bottom mortgage interest rates, easy credit, increasing investor interest in real estate and population increases. But rates have risen, credit is tightening and investors in some areas are getting cold feet.

Now the National Association of Realtors reports that existing home sales rose slightly to an annual rate of 6.92 million units in March from February's 6.9 million. But that was down from 6.97 million units in March 2005.

"This is ... evidence that we're experiencing a soft landing," says NAR chief economist David Lereah. "We may see some minor slowing in home sales as interest rates rise, but the market is clearly stabilizing."

Housing inventory stood at 3.4 million units available at the end of March, a 5.5-month supply. Lereah also points to the median existing home price of $218,000, up 7.4 percent but below the torrid double-digit growth of past years, as evidence of a slower but steadier market.

"We now see appreciation cooling to single-digit rates of growth — another sign that the markets are stabilizing," Lereah says in a release.

NAR's pending home sales index — a measure of transactions in which a contract has been signed but the deal hasn't been closed — fell 6 percent in March from its level of a year ago.

Lereah, in an April report, says he expects housing sales to move up and down throughout the year nationally, while remaining at historically high levels. He says that economic growth and job creation are strong enough to temper the impact of rising mortgage interest rates, which he expects to climb this year to 6.9 percent for a 30-year fixed mortgage. Add that up and it doesn't amount to the sound of a bursting bubble; it's more like the third-strongest year on record.

Vitner's not as optimistic. In a regional economic review released in April, he and his colleagues at Wachovia said they expected a 20 percent pullback in sales of new and existing homes over the next couple years.

But, Vitner says, the pullback is not a crash.

A strong economy and population growth are likely to drive long-term growth in price of housing. Prices are expected to rise in the mid- to high single digits in most markets, according to the Wachovia report.

"The economy is strong and has been strong for the last several years," Vitner says. "It's hard for me to see an overall slowdown."

Of course, the housing market you see depends very much on where you're sitting.

In fast-growing Southeastern cities such as Charlotte and Atlanta, as well as in Texas, sales continue to be strong. The Northeast is a mixed bag, the Midwest is stable and the West is weakening.

The NAR reports that existing home sales in the Northeast rose in March to an annual rate of 1.19 million units, about 2.6 percent higher than last year. The median price was $275,000, up 5 percent from March 2005. In the Midwest, existing home sales rose to an annual rate of 1.63 million, an increase of 3.8 percent over March 2005. The median Midwestern price was $160,000. In the South, existing home sales were moving at an 1.67 million annual rate, up 1.5 percent from a year ago. The median price was $181,000, up 6.5 percent. In the West, where the median price rose 8.3 percent to $341,000, sales were at an annual rate of 1.43 million, 12.3 percent lower than last year.

If you're trying to sell a multimillion-dollar house in the Boston region, you're likely to get more haggling now than you would have a year or two ago, and you'll probably have to sit on the property longer, the Boston Business Journal reports.

The inventory for Boston area homes in the $4 million range is up 70 percent, which could mean falling prices. "Many buyers and many sellers have time in this price range, which can, when there's a lot of inventory, create a very sluggish marketplace," said Charles Orr, who oversees the region's high-end business at Coldwell Banker Residential Brokerage. "There are a lot of qualified buyers out there, but they are very slow to commit."

Likewise with high-end properties in California's big cities.

"The activity where there's more discretion in the buying decision seems to be much slower," Paul Zeger, president of San Francisco's Pacific Marketing Associates told the San Francisco Business Times.

And if you're one of the many investors who gambled on real estate in Phoenix, Las Vegas, Florida, or elsewhere, chances are now is not the best of times for you. In some areas where speculators were especially active — such as in Florida, Phoenix and Las Vegas — Vitner says those investors are now backing out of contracts, leaving money on the table as they flee the market.

The Philadelphia Business Journal reports that luxury home builder Toll Brothers Inc. recently said signed contracts had fallen by 29 percent in its fiscal second quarter, and added that it will build fewer homes than it had previously planned. Speculative buyers, the company said, are canceling contracts in mid construction. The cancellation rate during the quarter ended April 30 came in at 8.5 percent, which is higher than Toll's historic average of roughly 7 percent, the business journal reports.

"Folks that were looking to buy are looking to sell," Vitner says.

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