Metro Phoenix housing analyst Mike Orr participated in a live chat on azcentral.com this week about the state of the residential market.

Orr, publisher of the Cromford Report and director of the Center for Real Estate Theory and Practice at Arizona State University’s W.P. Carey School of Business, shared his views on prices, sales, appraisers and mortgages.

Here are some excerpts from his online conversation with readers:

Kari: Mike, we bought our house in 2005 at the worst possible time. Are people still underwater for houses bought then? We are in ZIP code 85203.

Orr: Unfortunately, the answer is yes. We are nowhere near back to 2005 home-value levels. I am not sure how long it will take to get back to those levels. Some people say five more years, but I am not so sure. If employment growth continues, we could see home prices climb faster.

Mark: Is there a rule on how far back in time an appraiser can go for comps (comparable sales)?

Orr: Yes, they generally won’t go back more than six months. Ideally, appraisers don’t want to go back more than three. However, if they are appraising a unique property, they may have to go back a year.

Jimmy: Aren’t all of these California and Canadian investors creating another bubble? There is no way a working person can compete with their offers on homes.

Orr: I don’t think those investors are creating a bubble. Prices are still low. You can buy a home for prices similar to 2002 levels. ... The number of Californians and Canadians buying in Arizona is lower now than it has been for awhile. Look back to 2004; Californians were flooding the market then. Relative to history, homes are more affordable for average-wage earners, particularly due to low interest rates.

Billy: I have noticed quite a few new apartment complexes starting to go up. Will the new apartment “boom” cause problems with the housing market?

Orr: There are quite a few higher-end apartments going up and not many lower-end complexes. The danger is too many apartment developers get on that bandwagon and then we won’t have enough (people) who can afford the apartments. For the moment, I don’t think we have an overabundance of new high-end apartment complexes. But it’s always a dangerous sign when too many people are doing the same thing. But right now, I am more concerned with all the investors in the home market.

Kari: We may have to move to Denver in May for a job. If so, would you suggest listing our house as soon as possible or, say, in March? We live in central Mesa.

Orr: If it were me, I would list in January. That’s an ideal time because February and March are prime times for people looking for houses, and you must allow for the closing period.

Alex: What exactly is the appraisal process based on? I made an offer on two different places, and in both cases the appraisal came back $5,000 to $10,000 short of our agreed selling prices. I had to walk away because I couldn’t get FHA financing in either case.

Orr: That’s a very common situation now. Appraisals are based on comps, so with home prices moving up fast, it’s a more difficult process. I wish appraisers got paid more so they could afford to take the time and do more math to deal with this very volatile market.

Matt: Is it getting any easier for buyers in the market for homes costing $150,000 to $200,000?

Orr: Yes, it’s getting a bit easier. More ordinary homes are coming on the market, particularly in the lower price ranges, although you might have to look farther out in the fringe communities to find a house in that price range. But it might still be tough to get a loan and bid against those paying cash.

Mike: Anyone want to give me half of what Zillow says my house is worth?

Orr: You can find extreme cases of valuations on Zillow. The site is more for entertainment than true price valuations. Many Realtors ... tell clients to not take the Zillow number too seriously.

Selina: I have heard rumors that the housing market may dip again when banks clear out all of the foreclosures that are just sitting there.

Orr: I don’t think its very likely Phoenix’s housing market would dip for that reason. There’s no huge collection of homes banks are holding onto in Arizona and waiting to dump on the market. ... We have a speedy foreclosure process in Arizona, and we have a shortage of homes for sale here. Shadow inventory is an urban myth in Arizona.