* fewer sellers are seeing "multiple offer" bidding wars take place,

* there are more listings overall, with more homes on the market, and

* homes are taking, on average, a little longer to sell.

You may not have seen any signs of this change because it has been gradual, and it's not just happening in Atlanta. These changes are part of a national reaction to higher interest rates and higher prices, and I believe this change is a good thing.

I understand that, if you are a seller or a salesperson trying to sell a house in this market, you may not agree with me. But for the past five years, this nation has been in a real estate boom that has seen prices jump too far too fast. I believe it's time for all of us to take a deep breath and return to a more normal real estate market.

For years, many voices in the media have predicted that the real estate "bubble" would burst, and that housing prices would plummet. That would be bad news for many of us whose primary net worth is tied up in our homes.

Instead, we have seen the long-awaited "soft landing," with home sales and price increases slowing, while interest rates have remained low enough to still be affordable. Economists at the National Association of Realtors (NAR) are now looking for 30 year fixed rate mortgages to top out at around 7.25% sometime in 2007, and they are still predicting that 2006 will be the third strongest year ever for home sales in the US.

This "soft landing" is best put into perspective by recognizing that the annual appreciation rate for US existing homes for the past couple of years, around 11 percent and 13 percent respectively, could not be maintained indefinitely.

Economists have said for years that if real estate prices get completely out of reach of the typical buyer, then those prices become volatile. And that produces the kind of roller coaster ride in home prices that no one wants to see. Instead, the Atlanta area has been especially blessed with steady, yet moderate, price appreciation throughout the last decade.

And because Atlanta's median home price remains well below the national average, there is still room for future appreciation, whatever that figure may turn out to be. The national median existing-home price for all housing types is expected to rise 5.3 percent to $231,300 in 2006. The most recent data for the metro Atlanta area shows a median home price of $168,400.

So what does all this mean to buyers and sellers today? Here are some thoughts:

* Sellers need to understand that the balance between supply and demand in this market is approaching equilibrium. That's a big word which means the buyer has as much strength in this negotiation as the seller does, and that's a big change.

Houses which don't show well or are over-priced will simply not sell. This is ion contrast to recent years, when even clearly over-priced homes drew offers because buyers were fearful of missing out on a chance to own.

* As builders move out to the next exit to find cheap land to build new homes, look for intown properties to hold their value and appreciate faster than suburban homes. In fact, look for more tear-downs of small older homes and watch for so-called "McMansions" to be built in areas previously thought too modest to support such grandeur.

* Buyers need to be careful to not engage in speculation regarding their ability to resell quickly or to obtain a certain level of appreciation over the next few years.

While I am not predicting a recession in real estate, I do expect the average selling time in the Atlanta area to get longer than it has been over the past five years. And if you think you may need to sell in less than three years from the date you plan to purchase, I recommend that you rent instead of buy.

I know that sounds odd coming from me, a strong advocate of home ownership. But the fact is that real estate has high transaction costs, meaning there are certain typical costs every time the property changes hands.

Some of those costs, such as real estate commissions and shared closing fees, may be avoidable. Others, like transfer taxes and loan replacement fees, are almost always incurred by one party or the other. And if we go into a period of relatively low appreciation, you may not see enough growth in value to pay for even these basic fees, much less leave you a profit.

Finally, I want to recommend to buyers that this is particularly good time to stay away from "exotic" forms of real estate financing. Loans with "option payments" or programs offering extremely low "introductory" rates or payments can result in economic disaster if the underlying index rate unexpectedly rises.

In my opinion, those buyers who elect a standard 30 year fixed rate mortgage will likely be in the best financial position to prosper as real estate owners over the next few years.

There is substantial benefit to simply knowing in advance what your payment will be in the years ahead. And even though you may have solid plans for moving from Atlanta in the next couple of years, it is very possible that your plans may change. Should that happen, you'll be glad you chose the fixed rate program.