The prime Foothills zip codes of 85718 and 85750 with homes priced 325K-500K appreciated 8% last year.  However, there were 59% less number of sales and the average days on the market increased from 34 days to 43 days.  Also average list price to  final sales price became 97.50% versus 99.09% in 2005. I predict that the appreciation will continue in 2007 and the number of sales will increase as Sellers have become more realistic in the pricing of their houses for sale and buyers are feeling a sense of market stabilization.  Last year many Buyers feared if they purchased a home at that time, the properties could later depreciate; this feeling is much dissipated this year. In January, showings on listings have increased from last Fall and open houses are much better attended.  As interest rates go up, buyers also feel urgency not to wait any longer to purchase for fear the interest rates will continue to go up.