Treasure Valley home sales and prices rose last month, offering hope for builders and sellers in the Treasure Valley's housing slump. But Micron's layoffs and a downturn in pending sales suggest the upturn may struggle to take root.

September sales rose 18 percent in Ada County compared with September 2007, though they fell 8.5 percent in Canyon County. But sales volumes were still low - just 56 percent of September sales in 2004, the year before the bubble of 2005 and early 2006 and the slump that started in mid-2006.

Ada County's median home price rose to $205,000 from $200,000 a month earlier. Canyon's median edged up to $141,990 from $141,900.

Mike Pennington, a residential specialist with John L. Scott Real Estate, figures the layoffs of 1,500 Boise workers that Micron Technology Inc. announced last week will cause 300 or more homes to flood the market in the coming months, sending housing inventory back to July levels.

And pending contracts were down in Ada County "dramatically," Pennington said. "That tells me October and November will be pretty bad. Winter is traditionally a slow time, and with all the uncertainty with the markets and the election, it will get worse until sometime next year."

People with money to invest should be buying now, Pennington said.

"The inventory of higher-dollar homes is way down, because builders aren't replacing them, and they will never be replaced at these prices," he said. "Builders are discounting homes in the $500,000 to $800,000 range by 20 percent or more."

New home prices are down 22 percent in Ada County since September 2007, while existing-home prices were off just 3.6 percent.

Shaun Tracy, associate broker at Remax/Capital City, said much of the year's decline in new home prices represents expensive building lots working their way through the market. New homes for sale are sitting on lots that were probably purchased at the height of the market three years ago, he said.

"Today we have a six-year supply of building lots, so you can buy a lot for less than half what you would have back then," he said.

The national credit crunch is also hurting sales, according to Pennington.

"Some banks won't even make real estate loans because their portfolios are so heavy on mortgages," he said. "They are hoarding cash because they can't borrow from other banks or the Fed (Federal Reserve). Until consumer confidence returns, we'll continue to struggle."

Two builders reported encouraging sales.

Ted Mason, who just opened a new development of upscale homes in Kuna, said his sales have been consistent for several months.

"There are plenty of shoppers, and they seem to feel we are close to the bottom of the market, and I think that is close to true," he said. "Our numbers would be even better if shoppers could sell their own homes."

Holly Haener, director of sales and marketing at Corey Barton Homes, said the builder has increased sales in six of the first eight months of the year. Last fall, the company discounted 200 of its more expensive homes by as much as 70 percent.

The highest-priced homes that sold in the Valley last month were in Northeast Boise, where the median price (with just five homes sold) was $475,000, and Eagle, where the median was $382,627. The least expensive were in Southwest Caldwell and Parma, each with a median price of $125,000.

Brad Talbutt: 672-6737