Short sales. Foreclosure bargains. Neighborhoods with multiple for-sale signs. Welcome to the Ahwatukee Foothills housing market in 2009.

Just three years ago, buyers often got into bidding wars for homes in the mountainous, family-oriented section of Phoenix.

But today, as the economy has turned sour and real estate prices have plummeted, first-time home buyers are signing contracts for dream homes in Ahwatukee, while sellers who purchased at the top of the market are stuck with houses that are worth less than their mortgages.

"We have several empty houses in my neighborhood including the one right next to mine,' said Rob Brooks-Bilson who lives near the intersection of Desert Foothills Parkway and Marketplace Drive.

"Most of them have for sale signs, either by owner or by the bank. If it's anything like Las Vegas and other hard-hit areas, people are just turning in the keys and walking away. They're so far upside down on their mortgages that it's easier to just take bankruptcy or a short sale on the property."

Brooks-Bilson said the house next door to him is up for a so-called short sale, a deal in which a home is sold for less than the seller's mortgage balance.

So many people who are having trouble making house payments are calling Mountain Park Community Church, an Ahwatukee non-denominational church that regularly has 1,200 people at Sunday services, that the outreach pastor has put together a series of financial talks for area residents. The multiple listing service this week showed 690 homes for sale in the Ahwatukee Foothills and 85 of those are in foreclosure, said Dawn Workman, a real estate agent who lives in Ahwatukee and specializes in selling properties that have been foreclosed upon.

In addition, she said, 430 Ahwatukee homeowners have been issued notices that their properties are in the foreclosure process.

Public records show that in 2008, the ZIP codes 85044, 85045 and 85048 had a combined 175 foreclosures. A combined 383 foreclosure notices were issued in Ahwatukee's three ZIP codes.

In 2007, there were 41 foreclosures and 173 notices issued in Ahwatukee.

"The first thing I ask people when they want to list a house now is 'What do you owe?' " said longtime Ahwatukee real estate agent Mike Mendoza. "I wind up coaching a lot of people not to sell their homes now. I told a guy today that I thought he needed to rent his house and not sell it right now."

Meanwhile, Mendoza said he has hired a full-time short sales specialist for his Ahwatukee office. The specialist works exclusively on the complicated negotiations required to sell homes for less than the owner owns. He said his office handles about three of them a day.

"It's critical that people know what they are doing with a short sale and there are a lot of people out there who don't know what they are doing," Mendoza said.

He summed up the market overall as "discouraging" and "a battle" for sellers and their agents. But he also noted that there are great deals in Ahwatukee now for people who could not afford to live there just a few years ago.

"The prices are just unbelievable," Workman said.

She noted that one house on the market for less than $190,000 has four bedrooms and two baths. It was difficult to buy a home of that size for less than $300,000 in Ahwatukee just a few years ago.

"I ask many first-time home buyers now 'Have you thought of Ahwatukee?' and the response is always that they think they can't afford it," Workman said.

"But a house for $200,000 or $250,000 is very doable in Ahwatukee now. Of course they have to decide whether they want a bigger newer house out in Gilbert or a smaller older house in Ahwatukee."

Karen Pfander, Mountain Park Community Church outreach pastor, meanwhile, said the number of calls she has been getting from the people having trouble making house payments because of job losses or other financial problems has doubled to about 20 a week since last summer. The series of financial talks the church has planned starts Thursday. "All of a sudden I am getting lots of calls from people who are in big trouble and it happened really quickly," she said.

"They are people who were suddenly downsized or who are used to two incomes and don't have them now. They have no clue what to do or where to go. I was in a bind because I didn't know what to tell them."

Pfander said she has been surprised by the number of callers who held professional-level jobs, had savings and are used to paying bills and their mortgage payments on time.

"They did everything right," she said. "The world has turned upside down."

http://www.azcentral.com/community/ahwatukee/articles/2009/01/16/20090116ar-homesales0117.html