Who'll blink first?

If home shoppers are frustrated by the lack of bargains in the real estate market, they might want to follow John Pesa's lead.

Pesa was a bulldog of a buyer. When sellers would laugh at his outrageously low offers, he would counter with a lower figure. He would dig up information on comparable, but less expensive, houses to buttress his point and learned as much about the pricing and movements in the market as the brokers showing homes knew.

An architect with a master's in business administration, Pesa developed a detailed spreadsheet of possible homes that charted costs and various financial scenarios. He and his wife researched communities, collecting test scores on the local schools and timing likely commuting routes.

The result, after almost three years of research and shopping, was a house in Halifax that they bought at the end of summer for $81,000 below the seller's original price.

One thing above all worked in Pesa's favor: discipline.

"I was able to put myself in a frame of mind where I was a complete businessman," Pesa said. He put aside any sentimental considerations, such as where he would put the Christmas tree or where his children would play. "I was a stone cold hunter."

For home shoppers who don't have Pesa's tenacity, the current soft real estate market has been something of mixed bag. The pressure is off; they have time to shop around without being sucked into bidding wars. And there are lots of houses to choose from.

But what is available tends to be in the upper price ranges; mid priced homes are harder to find. Most important, home prices have only fallen around 5 percent -- hardly the kind of discount that would get buyers rushing off to a department store sale, much less to make the largest purchase of their lives.

Buyers are not only tentative; they're uncertain and worried about where the market is heading, said Karl E. Case , an economics professor at Wellesley College who specializes in real estate. Case said the most recent annual survey he and a colleague conducted among home buyers revealed growing pessimism about buying in a down market.

"They're scared they're going to buy something very expensive that's going to fall in value," he said. Sellers, meanwhile, he said, are being "stubborn. They seem to be holding out so far."

The result: "People are staring each other down."

Data on previous real estate market declines suggest there may be more room for home prices to fall in Massachusetts, but not much. For example, during the last major real estate slowdown in the late 1980s and early '90s, prices fell at most 6.8 percent, in 1991, followed by a 3.4 percent decline the next year, according to the Massachusetts Association of Realtors. Those declines, however, came after five straight years of double-digit increases in home prices in the mid-1980s.

Case described home prices as having "downward stickiness," meaning they don't fall nearly as much as they rise during the strong periods.

Moreover, in the last period, the economy was in terrible shape, shedding thousands of jobs. This time, though, the economy is growing and adding jobs.

So Case's conclusion is the housing market is in "that flat period, of four to six quarters, where prices don't plummet. They hold on."

That doesn't sound like much of a buyer's market. But Bob Simone , general manager of Buyer's Network Inc. in Canton, a buyer-broker who represented Pesa, said home shoppers do have leverage over sellers in the current market, "but the leverage has to be within reason."

Pesa's experience notwithstanding, Simone said home sellers are now are pricing their properties much closer to the final selling price they have in mind, so a ridiculously low offer is not likely to spark negotiations.

Dave Lightner , a software engineer who lives in Northborough with his wife and daughter, has been shopping for a three-bedroom home since the spring. So far he's seen little to like in their price range, $350,000 to $450,000, and little to indicate sellers are willing to make a deal.

"Very few of them are getting sold, and very few new ones are coming onto the market. And most of them are slowly reducing their prices," Lightner said.

Meanwhile, Nicole Gargano is more inclined to buy now now that she sees home prices on Cape Cod finally within sight of her limit of $300,000. Even with recent reductions on some homes -- $50,000 in a few cases -- Gargano continues to be frustrated by the high cost of real estate on the Cape; one house she and her partner saw in their price range that they liked sold before they could act on it.

"I'm thinking it's time to buy because we're concerned the prices may go back up," she said. Moreover, with interest rates now back down into the low 6-percent range, Gargano said it "would be in our best interest to buy now rather than wait to see what happens."

She may be onto something. Simone said brokers in his office report the buyers they are working with appear ready to make offers once the spring selling season arrives. He suggested more motivated buyers shop now, because by spring the best deals might be gone.

Traditional brokers are also predicting a more normal real estate market come 2007. David Wluka , president of the Massachusetts Association of Realtors, said many sellers he deals with don't have to move out of their houses, and so are more likely to hold out for their price. So he predicts the "stare down," as Case called it, will end soon as buyers blink.

"Buyers are more motivated to move into something than sellers are to move out of something," Wluka said.

Even so, buyers should not panic at a sudden resurgence in the market and make rash offers, said John Pesa, the new Halifax homeowner. Be patient, be selective, he counseled; but more important, get to know the target market inside and out.

"You'll get to a certain point where you'll be able to recognize what's a good deal," Pesa said, "and what's not a good deal."

Andrew Caffrey can be reached at caffrey@globe.com.