Looking for the bright side in today’s real estate market? Here’s the best you’re going to get:

If you don’t have to sell your home, be thankful. And if you are of the fortunate set that can afford to invest in real estate, now’s the time, because prices are dropping.

“For the first time, there are some great buys out there,” said John Dunning, owner of Windermere Real Estate on Orcas and San Juan islands. “The asking prices are a little soft.”

The median home price in October was $395,000, down from $440,000 in September and $515,000 in August, according to the Northwest Multiple Listing Service, which tracks real estate market data in 19 Western Washington counties.

The “median” means half of the homes sold above that price, half sold below.

Pat O’Day, owner of the John L. Scott Real Estate office in Friday Harbor, sold two properties in October — one on San Juan Island and one on Center Island. He’s optimistic that someday the economic downturn will change for the better, but he wouldn’t guess when that might be.

“I don’t think anyone has a crystal ball that can tell them what the next year is going to produce,” he said. “We don’t know the depth of this recession — we don’t know where the bottom is. The light at the end of the tunnel is that we are the Martha’s Vineyard of the Pacific Northwest. God isn’t making any more San Juan Islands and there is an insatiable thirst by a very affluent, young generation, as they head toward their retirement years, to have a presence on the islands. Eventually, water will find its own level, but when that will happen, no one knows.”

In another story on SanJuanJournal.com, William T. Morrissey, a financial adviser for 26 years and president of Sound Financial Planning in Friday Harbor, opined that the national recession was caused largely by bad debt, thanks to loose mortgage lending, a negative savings rate, accumulation of credit card debt, and borrowing against home equity. That led to the plummeting stock market, which lowered consumer confidence, which means less spending.

O’Day said that when the market does turn for the better, “We will be a more practical nation, off our euphoric spending spree.”

The local real estate market started showing signs of slowing in June. There were 66 new listings that month, up from 60 in June 2007. There were 429 active listings, up from 362; 18 pending sales, down from 29; and 12 closed sales, down from 24. The median price was $501,250, down from $506,900 the previous June.

In August, there were 45 new listings, 484 total active listings sales, 29 pending sales and 23 closed sales. The average price was $645,261, the median price $515,000.

In September, there were 34 new listings, 447 active listings, 17 pending sales and 13 closed sales. The average price was $598,154, the median price $440,000.

In October, there were 41 new real estate listings, 435 total active listings, 14 pending sales and 20 closed sales. The average home price: $543,233. The median home price: $395,000.

In October, there were 14 more new listings and 95 more active listings than a year ago, but three fewer pending sales and only five more closed sales than a year ago. Median home prices dropped 43.57 percent compared to October 2007, perhaps in response to that market slowdown. (Dunning doubts prices dropped that much — large sales can skew the average and median price. In October last year, Dunning’s office handled a $5.5 million sale on Orcas Island.)

Regionwide in October, there was a 2.52 percent drop in the number of listings, a 27.45 percent drop in pending sales, and a 7.44 percent drop in the median sales price.

But on the bright side, despite the drop in home prices, San Juan County homes still commanded the highest prices in the 19-county Northwest MLS region. King County was second with an average home price of $447,281 and a median of $358,500.

Jefferson County, population 26,000, was third. It had 51 new listings, 559 total active listings, 16 pending sales and 21 closed sales, with an average price of $396,221 and a median price of $342,500.

Regionwide, there were 9,647 new real estate listings, 46,189 total active listings, 4,445 pending sales and 4,512 closed sales, with an average price of $346,621 and a median price of $291,000. October’s pending sales fell more than 27 percent from the same month a year ago, and dropped nearly 26 percent from September. The number of homes on the market is at its lowest level since February.

Two things working against the real estate market: Consumer confidence and misperceptions.

The perception that “no one is lending money” is inaccurate, Northwest MLS director Matt Deasy of Windermere Real Estate/East Inc. said in the MLS’ monthly report. Most loans have been federalized via Fannie Mae and Freddie Mac, but money is available, he said. Deasy suggests potential buyers talk with real estate agents for referrals to good sources for mortgage loans.

In that same report, Northwest MLS director Ken Bacon of Windermere Real Estate in Redmond expects the market will take life once consumer confidence rebuilds. “The public is waiting for a sign that all is going to be OK,” he said.

Dunning’s offices had a combined 11 transactions in October. Still, he’s optimistic that the market could turn here next year. In Arizona and California, home prices seemed to have bottomed and are improving, foreclosure rates have tapered off, and homes that had been foreclosed are being sold. That could translate to future buyers here, he said.

“Our real estate values have held up better than any investment you can look at,” he said. “Even now, there are buyers out there but they are looking for a pretty good deal. They’re being pretty hard-nosed on prices.”