The housing market is in a state of flux, but East Valley commercial developer Michael Pollack still sees opportunities for investors — if they’re smart and do their homework.

President of Mesa-based Michael A. Pollack Real Estate Investments, he has built a successful business renovating aging commercial projects and now owns more than 60 centers throughout the state.

Pollack, who has been in the development business for more than 30 years, will share his thoughts on the market’s future at the Arizona Real Estate Investors Association’s third annual conference in Phoenix on Saturday.

The Tribune spoke with Pollack Wednesday about the state of the Valley’s market. Here’s some of what he shared.

QUESTION: How would you characterize the Valley’s current real estate market?

Answer: I think that we have a lot of the real estate market currently, in all sectors, that’s overpriced. I don’t think that every piece of real estate is overpriced, but I think a lot of them are. As I said back in the year 2004, I thought that we were getting way too much investor activity in the single-family marketplace, and I thought that the loans were way too creative.

Q: What kind of impact are we seeing now from that influx of investors?

A: Investors in some cases are still holding out hope that the values will go back again to what they were in 2005 in fairly short order, and I don’t see anything that’s going to accomplish that. I think before we can truly see values start to stabilize, we need to hit the bottom. And I don’t believe we can hit the bottom until we sort through the subprime mortgages that are out there...(People) got in on low teaser rates and now those rates are at a more market rate, and they can’t afford the house that they’ve got. They try to refinance it and it won’t appraise for what they bought it for. And then it gets worse because they put nothing down so they have no equity, So how do they refinance it?

Q: Are there any investors who see this as an opportunity?

A: Where there’s confusion there are opportunities...I don’t care what type of real estate. I don’t care what type of investment it is. Timing is everything in business. If you’re timing is right then you could do very well...I knew people who literally had 20, 25 homes that they bought at the highest part of the market in 2005. I said back then, “Be very careful. If you can’t support the negative cash flow because you bought too many of these homes or too many of these condos, then you need to treat this like a garden. It’s time to prune your portfolio.”

Q: Are certain areas of the Valley feeling the impact more than others?

A: Yes, and a part of that is based on gas...Here in Arizona if it takes you an hour to go from your doorstep to your job, think about the amount of gas you’re burning up. And think about the fact that today we’re in a gas situation where we’re over $3 a gallon right now. So it’s pretty obvious that the outlying areas are going to be suffering the worst, and they are.

Q: Do you believe that prices will eventually go up again in some of those outlying areas?

A: I believe it is more than possible that they could go back to the previous levels they were. It could take time, and there are a lot of factors that could enter into that equation. If interest rates were to spike more dramatically, then that makes it that much more difficult to afford the home...Anybody that thinks they know the month or exact time that the market will rebound, they might as well believe elephants are all pink, they’re all named Dumbo and they all fly through the sky.