Real estate agents are buzzing: Homes are half-priced.

Real estate agents are buzzing: Homes are half-priced. There is a swarm of buyers. The housing market is starting to recover.As proof, agents point to a bevy of offers on several listings. The recovery is being driven by aggressive pricing on cheaper homes, with discounts up to 60 percent off previous sales prices.The best deals, according to listing data, appear to come from areas on the outskirts of San Diego in areas such as Valley Center and Ramona and in foreclosure clusters such as Oceanside.But not everyone is sold on the idea that this is a recovering housing market. In contrast to some real estate agents' positive assessments, some data suggest that home prices will continue to decline:-- It would take more than 12 months to sell all the homes listed for sale. Many housing analysts consider six months or less of inventory a healthy amount.-- Foreclosures skyrocketed in 2007, and some foreclosure trackers expect even more this year than last.-- Prices have dropped for 19 straight months, with the last four months showing some of the steepest declines.All those numbers fail to faze real estate agents' optimism because, they say, current activity will not show up in such data for another two or three months.And though spring perennially attracts more home buyers, real estate agents say they are seeing an extraordinary explosion of buyers.Kurt Kinsey, a real estate agent in Oceanside, listed a home at almost 40 percent below its last sales price in 2005. Soon, he had 31 offers from interested buyers."I've done this for 21 years and even in a hot market, I think the most I had was nine (offers)," he said. "I think we might have turned the corner as far as falling prices."Oceanside has seen some of the county's deepest price reductions. During the boom of the market, some neighborhoods with relatively higher crime rates saw home prices soar past $450,000. Now, some of those homes have entered, or are in danger of, foreclosure and are listed for less than $200,000.And the steepest discounts are on lower-end homes. Homes priced $420,873 and lower have fallen 25 percent in a year, compared with a 10 percent fall in prices for homes more than $629,470, according to data from Standard and Poor's Case-Shiller Home Price Index.Despite a price tag more befitting the Midwest than San Diego, many of the Oceanside homes struggle to sell because of the condition and location, real estate agents said.Maria Lopez, a Vista agent, listed a Libby Lake-area home for $199,000 to $212,000, at least 57 percent below the last time it sold in 2007 for $490,000.Foot-high weeds blanket the home's front and back yards. Bits of trash litter the deeply stained carpets inside. But there are no holes in the wall. This one is in good shape, Lopez said.Still, the five offers she has received are all from investors, not would-be homeowners."Even though there's people who want to buy a home at this price, they don't think it looks like this. They don't see the value," Lopez said. "In my experience, the paint and carpet to fix this property won't run you more than $3,500. But in the eyes of the buyer, this is three months of work and $3,500. They want something that is ready to move in."That philosophy has left many deals to investors. And they are pouncing on deals in high numbers, said Brian Crisp, a San Diego broker who structures loans for investors.Mostly, investors will look to fix up a home and sell it for a profit. But some homes are so deeply discounted, Crisp said, that investors can rent them for a profit."My business had doubled just in this month. And I'm seeing some cash-flow potential with a lot of deals lately," he said. "But those guys (investors) are running a lot of risk because there's so much volatility in the market. ... Your exit strategy has to be really bulletproof, or you're going to lose your shirt."Investors are finding their deals in the county's backcountry and in Escondido, where deals are plentiful because housing recessions tend to hit fringe metropolitan areas first, Crisp said.Not all deals are snatched up by investors. Bargains in foreclosure clusters such as parts of Oceanside have attracted home buyers as well, said Kinsey, the real estate agent. Of the 31 offers he received on a home listed for about $340,000, only one was an investor.Because pricing is one of the more effective incentives for buyers, the housing market could soon recover, said Edward Leamer, director of UCLA's Anderson Forecast."We tend to be optimistic because home prices have fallen so much that, sometime soon, it's really going to attract some buyers," he said.However, some real estate agents and housing analysts point to other measures. Christopher Thornberg, economist at Beacon Economics, thinks home prices need to fall another 20 percent so that the median home price is affordable for the median household income.That would take the median price, where half homes sell for more and half for less, down from $415,000 in February to $335,000, according to DataQuick Information Systems.At that level, the typical mortgage payment, assuming 6 percent interest, would be $1,600, or one-third of the median income, according to Claritas, a San Diego demographic tracking service.The last time typical mortgage payments in San Diego County matched the housing advocate-recommended one-third of incomes was 1999.During that time, the inflation-adjusted median price was about $265,000 and interest rates were 8 percent, according to data from the Federal Housing Finance Board and DataQuick.Thornberg cites history in thinking prices will continue to fall. Home prices exceeded median incomes immediately prior to the last housing recession during the early 1990s, according to DataQuick and Claritas data.And the majority of listings in today's market exceed the median income: 79 percent of the county's 12,000 active listings are higher than $335,000, according to data by Sandicor, San Diego's listing service.While there are listings such as the 60 percent-off Valley Center home listed for $169,000, or $103 per square foot, there are still others such as a one-bedroom home in Escondido listed for $640,000, or $800 per square foot. The median price in February was $256 per square foot, according to a real estate association report.Some analysts said that sellers are hesitant to reduce their asking price, meaning widespread affordability could take a long time."Those who are paying attention and realizing that they're not getting any offers, they're going to figure it out and lower their price," said Jim Klinge, a real estate agent in Carlsbad. "How many sellers are willing to keep lowering their price until it sells? Maybe one out of 50."