In Salt Lake County, 2,712 homes changed hands in the July-August-September period, down 33.8 percent from the same three months last year, according to a new report by the Salt Lake Board of Realtors.

Among other counties, Tooele had the biggest decline in sales, down 36.4 percent, followed by Utah County, down 33.9 percent. Sales in Davis County were down 24.3 percent, with Weber County, down 22.4 percent.

The drops, at levels unseen in years, are in stark contrast to the steady increases in home sales seen since the early 2000s.

"It's like we were speeding along at 150 miles per hour and now we're going the speed limit," said Gary Cannon, president of the Salt Lake Board of Realtors. "The market is just slower now, and we just need to get used to it."

Slower sales have led to slower appreciation, which is tilting the landscape in favor of buyers.

Median selling prices, which had been increasing in many areas along the Wasatch Front in excess of 20 percent in 2006 when compared with 2005, are rising at a lower rate this year. Price gains in Salt Lake County and its neighboring counties north and south, for example, did not top 10 percent in the third quarter.

Selling prices in Salt Lake County were up 5.4 percent in the third quarter, to $253,000, compared with the same period in 2006. Prices in Davis County were up 9.7 percent, to $230,500, with Utah County increasing 8.1 percent, to $241,000.

The two most affordable counties saw the largest increase in median selling prices. The median in Tooele County was $192,000, up 13.6 percent, while the median in Weber County was $168,960, up 13.1 percent.

The decline in sales and pullback in appreciation are creating adjustments for a number of sellers. Many are seeing their homes remain on the market because of the reduced pool of buyers. Sellers of homes priced above $300,000 are having the toughest time, Realtors say.

Bob Scofield has experienced that firsthand. He listed his 9,200-square-foot home in Orem with a Realtor about five months ago at the appraised value of $725,000. He later reduced the asking price to $699,000 before taking it off the market and listing it on a for-sale-by-owner Web site for $679,000. It's now listed at $659,000.

"Things have definitely slowed down a bit," Scofield says.

Up until early summer, Utah has been able to avoid the downturn in residential real estate that is plaguing much of the rest of the country. The state's housing market had been benefiting from Utah's robust economy, stellar employment growth and steady inflow of new residents from other states.

But now, Utah's real estate market, like many others, is being affected by tighter lending standards established in early summer in the wake of the subprime predicament.

Many lenders, responding to an increase in defaults of risky loans made in recent years, especially to subprime borrowers with less than good credit, are requiring better credit, larger down payments and more cash reserves from borrowers. The resulting tightening has somewhat reduced the pool of available buyers.

"People just aren't buying. They want to buy, but they can't because of the tighter lending restrictions," said Brett Matsuura, principal broker with LibertyOne Real Estate in Cottonwood Heights.

"It makes things more difficult."

Perhaps an even larger factor is the run-up in prices along the Wasatch Front over the past couple of years.

Strong appreciation has put homeownership out of the reach of many Utah families whose incomes haven't kept pace.

Most economists familiar with Utah believe the state's real estate market will not see the huge drops in selling prices or sales seen in states such as Nevada, Arizona and Florida given Utah's strong economy and its ability to generate new jobs and attract new residents.

"Our housing market is slowing down but it's still solid," said economist Jeff Thredgold, a consultant for Zions Bank in Salt Lake City. "I don't see big-time declines in prices. I just see appreciation slowing down to single-digits [annually]."

Chief economist Mark Knold of the Utah Department of Workforce Services agrees. "It could take a fairly short period of time for our population growth to absorb some" of the excess inventory of homes for sale, he said. "Things could be better by the end of next year."

Broker Matsuura believes FHA reform being debated in Congress, if approved, also could help real estate markets in coming years.

The measure would help more buyers qualify for home loans by requiring less of a down payment for FHA-insured loans and by stretching payments over 40 years instead of 30. It also would help more buyers qualify for loans in other ways.

Many sellers, shaken by the downturn, are hoping these and other measures will help re-energize the local residential real estate.

Craig Christensen, of Saratoga Springs, is one with concerns.

Christensen and his wife, Renee, moved into their new home in July and consider themselves lucky to have even sold their former home at a price with which they could live.

But now the couple, like others who have purchased in higher-end areas, are watching as building in their neighborhood has come almost to a halt. Sellers in their area have reduced asking prices as a way to get properties sold.

Instead of being surrounded by scores of other families in houses priced from $400,000 to $700,000, the Christensens are surrounded by empty lots and unoccupied houses with for-sale signs in the windows.

Craig Christensen said he's worried about the growing number of for-rent and lease-to-own signs cropping up nearby, including one in an unsold house next door.

He and his wife have a nagging feeling their home is not worth what they paid for it and they may have to wait years to turn any type of profit if they do sell. They plan to stay put for a while.

"This is definitely not what I had in mind when we decided to move," he said. "I'm very nervous about how the market is going."

lesley@sltrib.com