Homebuyers looking for starter or project homes in Corvallis will find slim pickings, but the supply gets deeper and deeper at the top end of the market.

At the upper range of the residential real estate market, sellers are even starting to slash prices, a move unheard of in Corvallis just a few months ago.

"We're seeing dramatic price reductions in new construction, and that's just unheard of," said Ann Morgan of Town & Country Realty. "We've just never seen that before."

Thanks to tighter lending policies and a generally slower housing market, homes ranging from $300,000 to $500,000 make up 75 percent of what's available in town.

And in high-end homes over $500,000, real estate agents are now looking at a 14-month supply. Although those houses make up just 20 percent of available residential properties, it's a buyer's market, local real estate agents say.

Prices are up just a bit from a year ago, but fewer homes are selling. In the third quarter of 2006, 237 properties sold at a median price of $276,000. This year, just 188 properties sold in July, August and September and fetched a median price of just over $281,000.

"That's within one percent," said Alan Deitch of Raising the Bar Real Estate. "It's kind of flat."

The median price for all homes sold in Corvallis over the past six months is $291,700. That's below the price for the same time period in North Albany, where the median was $323,750, and Philomath, where the median was $300,450 - although real estate watchers caution that the comparatively low number of homes sold in Philomath can cause wild fluctuations in price data. The median price for homes sold in Albany in the past six months is $203,900.

Warnings nationwide of a housing slowdown trickled in over the summer, but happened gradually enough that many sellers didn't see it coming.

"When our market started to shift from a seller's market to a buyer's market the shift was so slow, it was almost like watching an oil tanker turn," Morgan said.

Deitch and Morgan agreed that the Corvallis average of a five months' home supply is half the national average, and so is stronger than some other cities around the country are facing.

"The Northwest has held up better than the rest of the country," said Deitch. "It isn't what it was in '05 and '06, but those were such fantastically great years, and you're not going to have that forever."

Starter homes aimed at first-time buyers remain in high demand. As of Wednesday, only

17 homes - just 6 percent of homes available - were listed under $200,000.

Morgan said that price range in Corvallis simply doesn't include new homes, only resold houses and townhouses, making the market consistently competitive.

But with new home construction aiming squarely at high-end buyers, starter homes have yet to become a growth industry in Corvallis.

"If there's not a lot of starter homes, people aren't moving up," Deitch said. "A lot of people would like to purchase in Corvallis, but because the prices are so much lower in Albany, Lebanon and Sweet Home, they are going out there and commuting."

Reporter Matt Neznanski can be reached at 758-9518 or matt.neznanski@lee.net.

CORVALLIS HOME PRICES

Month Median price

September $280,000

August $274,250

July $288,397

June $314,192

May $299,950

April $295,000

March $304,000

February $295,000

January $278,691

December, 2006 $252,000

November, 2006 $320,250

October, 2006 $290,000

Source: Willamette Valley Multiple Listing Service