After five years of sizzling growth, U.S. home price appreciation is showing signs of cooling.

Pending home sales — a leading market indicator — are down from a year ago, according to the National Association of Realtors.  In many of the nation's hottest markets, brokers also are reporting a growing gap between sellers' asking prices and what purchasers are willing to pay.

For prospective home buyers, the market shift provides a chance to remaster an old negotiating tactic: the art of the lowball offer.  Strategies for securing a below-market price vary by locality. In any region, however, experts say bargain-hunting buyers can close favorable deals by applying a few basic principles, and by always using an Exclusive Buyer's Broker to help them negotiate the best possible price.

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The stories keep piling up. In many once-sizzling markets around the country, accounts of dropping list prices have replaced tales of waiting lists for unbuilt condos and bidding wars over humdrum three-bedroom colonials.

The message is clear. Five years of superheated price gains rescued America from stock market collapse, put billions in consumers' pockets, and ignited a building boom that bolstered the nation's economy. But it's over. The great housing bubble has finally started to deflate.

You won't find that news in broad national statistics or the upbeat comments from the real estate industry. The latest official figures, for example, show both new and existing home sales rising in March, a mixed bag on prices - and a record number of new homes on the market.

But FORTUNE's on-the-ground reporting - in what up to now have been some of the nation's hottest areas - paints a very different picture: Contracts are being canceled, deals are drying up, prices are starting to drop. The psychology is shifting even as thousands of new homes and condos join the for-sale listings each day - so the downward pressure will only get worse.

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In his first public comments as a private citizen since leaving the Federal Reserve in January, former chairman Alan Greenspan said Thursday that the housing "boom is over" but did not share his views on hot issues such as inflation, interest rates or Fed policy.

"This has been quite an extraordinary (housing) boom," Greenspan said during a Bond Market Association dinner in New York. "The boom is over. I think we can safely say that with a strong degree of confidence."

However, he said, there is "no evidence that home prices will collapse." While he did not rule out price declines in "frothy" markets, he said it is too early to determine what impact a slowing housing market would have on consumer spending.

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The first time home buyer – what an exciting time! But it’s also a frightening and challenging time. Unless you’ve done everything leading up to this moment right, you’re probably going to be faced with some issues such as finding good financing sources. Here are some tips to get you on the right road early, and to correct some of the potential problems.

Start saving early. Especially if you have limited credit history on your credit report, the first time home buyer should be able to offer a sizable down payment. Lenders are naturally wary of first time home buyers, and lowering the amount you need to borrow will help you get a first time home buyer loan at a better rate.

If it’s too late to start saving early, start looking carefully at your funding sources. There are some helpful first time home buyer programs offered by lenders. These mortgages sometimes offer better rates and terms and may even assist with the down payment for the first time home buyer. Ask your bank or lender about special first time home buyer mortgage rates.

Some areas offer incentives for the first time home buyer. You may find a first time home buyer program that only applies if you buy a home in a particular area and pledge to live there for a specific period of time. As cities and neighborhoods seek ways to rebuild areas that are falling into decline, these first time home buyer incentives are a way to encourage families to invest in that rebuilding effort.

Patience is a virtue, but never more so than for the first time home buyer. There are lots of hoops to jump through on your way to becoming a home owner. Some lenders require first time home buyers to go through money management classes that will stress the importance of making mortgage payments on time. Go into these with an open mind – you might just learn something important!

Be sure you can make those payments. Whether you go through the classes or not, take time to create a workable budget and realistically consider your financial status. Are you going to be able to make the payments on time, every time? If you have doubts, take a step back and reevaluate the situation. If you, as a first time home buyer, find you can’t make payments, it’s going to impact many years into your future. Not only are you going to have trouble keeping your house – your first house – you’re probably going to find it impossible to purchase your second house if you’re faced with foreclosure on your first.

Be prepared to settle for less than terrific rates as a first time home buyer. As a first time home buyer and a young consumer, you may not qualify for those great rates and terms advertised by lenders. But if you can make the payments on time, every time, for a couple of years, you’ll likely be able to renegotiate better rates. Meanwhile, keep your credit dealings completely perfect. If you use credit cards, limit the use so that you know you can make each payment, and make it early! There’s nothing worse than being credited with a late payment because a letter was tied up in the mail for longer than you expected.

A first time home buyer does have some hurdles ahead, but the ultimate goal is certainly worth the effort.

You don't need to be in the market to buy or sell a home to be affected by the cooling housing market.

Economists, investors and the Federal Reserve are watching home building and home sales carefully because the sector has reached so far throughout the economy in recent years, lifting all manner of consumer spending and economic activity.

This week has brought several new readings indicating that the super-heated real estate market of 2004 and 2005 is rapidly fading in the rearview mirror.

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