Home sales fell by 8 percent last year in Lawrence, following up on an even larger 10 percent drop a year earlier.

No wonder leaders at Lawrence’s two largest real-estate agencies are looking forward to a turnaround this year.

After all, they figure, it can’t get much worse.

“We’re cautiously optimistic that the worst is behind us,” said Mike McGrew, chief executive officer of McGrew Real Estate. “The fact is, Lawrence has weathered lots of storms in the past, and we’re going to weather this one.”

McGrew Real Estate today will begin distribution of a report card of sorts for Lawrence’s real-estate market during 2007. Among its findings:

l The 1,431 sales recorded last year ranked as the lowest number in a decade, when 1,368 sales were completed in 1997. Sales had been on the rise for much of the decade, peaking at 1,749 in 2003 before dropping each year since.

l Sale prices continue to rise. The average price paid in 2007, McGrew said, was $201,452, up 5 percent from a year earlier.

Mark Buhler, broker and vice president for Stephens Real Estate, said that the downturn of recent years had realigned the mindsets of buyers and sellers.

Rarely are homes now listed at above-market prices, and prospective sellers now understand the value of making all necessary upgrades – whether it’s for new paint, carpets or anything else – before scheduling an open house.

“If you don’t, the market will absolutely ignore you,” Buhler said.

That said, homes continue to sell for anywhere from 96 percent to 98 percent of their list prices, Buhler said, an indication that sellers are being especially sensitive to market conditions.

Now, buyers, drawn by historically attractive mortgage interest rates, are coming back.

“Buyers have been told for the past two or three years: ‘Do not, do not buy a home. It’s awful,’ ” Buhler said. “But life goes on. People get married. People accumulate families. We’re seeing – in open houses and on the phones – that there are real people out there interested in housing. They understand that rates are very competitive, selection is there and (homes are) more keenly priced.”

He likened the activity to “The Wizard of Oz,” when Dorothy’s home lands after being carried away by a cyclone, and along comes a call to “come out, come out, wherever you are.”

“People are coming out now,” Buhler said. “They’re starting to come out, come out wherever they are.”