Low interest rates, dropping home prices and a glut of homes on the market make it a great time to buy a house in Skagit County even as home values are beginning to show signs of stabilizing, real estate experts say.

“It’s just the best time to buy in the last 20 years,” said Kurt Acton, a member of the North Puget Sound Association of Realtors board of directors. “These prices are so low. You can get great interest rates.”

But if you’re looking to sell your home, the news isn’t so good — those dropping home prices mean more competition for buyers and less money when you close the deal.

A comparison of median home prices in Skagit from September 2007 to 2008 shows a drop of 13.5 percent, according to Northwest Multiple Listing Service.

In October, Skagit’s median home price rebounded slightly with just shy of a 1 percent increase from 2007 to 2008 for that month. And in November, the drop from 2007 to 2008 was less than 1 percent, according to the Northwest MLS, which tracks property sales for brokers. December figures were not available as of press time.

Real estate experts say that snowstorms and not showing homes during the holidays likely had a negative impact on the December housing market.

In Island County, the market showed small dips of about 3 percent in both September and October and a 14 percent increase in price from November 2007 to November 2008, according to Northwest MLS.

By comparison, Clark, Snohomish and Pierce counties’ home prices have declined consistently in the double digits, hovering about 10 percent or higher from September to November. King County’s decline has been between 8 percent and 12 percent.

But the home price statistics don’t tell the whole story.

Skagit’s real estate market is “more normal,” than some other areas in Western Washington, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

Different price points within the local real estate market can make a difference in how well home prices hold up to tough economic times. Bargains might be found in the higher-end markets, such as homes priced higher than $500,000, where the supply has outstripped the demand, Crellin said.

“There are going to be values out there,” Crellin said. “It’s going to depend largely on the credit worthiness of the borrower.”

In the less-expensive market, such as homes priced at $250,000 or below, the supply and demand are in balance, Crellin said.

The MLS median home sales price in Skagit indicates the market might become more stable, Crellin said. But he also said that the number of listings in Skagit makes him worry that buyers are reluctant to purchase until they think they’ve gotten the lowest price possible.

“The buyers are waiting as the inventory increases,” Crellin said. “Buyers have more choices, and they know they can offer lower potential purchase prices and have some likelihood that it could be accepted.”

Prices on some properties in Skagit have dropped to the levels of 2004, said real estate agent Acton, who also is an agent at Windermere Skagit Valley.

“Investors are just buying and buying right now,” Acton said. “We’ve got lots on the market, low prices and really great interest rates.”

Now may be a good time for buyers to consider purchasing a new, larger home, he said.

“Developers, right now, are much more negotiable because of the lack of qualified buyers,” Acton said.

Still, the new year might bring changes, both good and bad, for the real estate market across the nation.

Many people are anticipating improved economic times with the Barack Obama administration and that could affect home sales, Crellin said.

Also, Fannie Mae and Freddie Mac, the Federal National Mortgage Association and Federal Home Loan Mortgage Corp. respectively, are pressuring their holders of adjustable-rate mortgages to renegotiate the loan terms to prevent foreclosures, Crellin said.

Other factors might come into play to affect Washington state, which had the fifth-lowest foreclosure rate in the nation in the third quarter of 2008, he said.

“We still have, within the state of Washington, a significant number of loans, most taken out in 2006 and 2007, that will be resetting in less-favorable terms throughout 2009,” Crellin said.

Those homeowners could be at risk of foreclosure, he said. That might mean that the state, and possibly Skagit and Island counties, could see a rise in foreclosures and potentially more homes on the market, Crellin said.

Many buyers worry that if they buy too soon, they will miss the bottom of the market, Acton said. But Acton cautioned that there are some indicators that prices in Seattle could be stabilizing and rising and that the local market is near the bottom of the price drop. Skagit real estate markets tend to follow King and Pierce counties’, he said.

“We are getting information that they are actually surging forward,” Acton said. “The future is bright.”

In addition to data from the Multiple Listing Service, measures of home resale price indicate that the decline in prices in Skagit and possibly nationally could be stabilizing.

Economists at First American CoreLogic say that the federal Home Price Index, which tracks repeat sales, shows a 10.4 percent decline in resale prices from October 2007 to October 2008.

That figure is a slight improvement from September figures when the decline from 2007 to 2008 was 11.2 percent, according to CoreLogic, a company that tracks real estate static.

Early figures for November Home Price Index indicate that the national resale price reduction will decline by 9.6 percent, which is another improvement, according to CoreLogic.

Mark Fleming, chief economist for First American CoreLogic, said in a prepared statement that the consistent deceleration in resale prices from September to November is “encouraging” because it indicates the price drops could hit a “trough.”

Resale prices in Mount Vernon and Anacortes this past October were down by 7.98 percent compared to October 2007, according to CoreLogic’s calculations. That’s almost flat compared to the September 2007 to 2008 decline of 7.98 percent for those cities.

Mount Vernon and Anacortes compare favorably to Seattle, Bellevue and Everett’s October resale price decline of 9.4 percent and the statewide decline of 9.52 percent, according to CoreLogic.

Fleming, like Crellin, said that other economic factors, including a large inventory of unsold homes and rising loan defaults, will cause future decline in resale home prices, but that trend could be offset by a surge in FHA lending.

“Buyers should go out and buy,” Acton said. “If they really want to get a good deal, now is the time.”