The California press reacts. "With unsold inventory continuing to grow, now at over 7,000 properties, according to the California Desert Association of Realtors, the valley market appears a far cry from the fevered seller's market of early 2004. The ramifications of a healthy residential market are sweeping for buyers, sellers, renters and investors alike."

"The current unsold inventory, already up 10 percent from just a month ago, is more than double the level of February 2004 and more than five times the level seen in April 2004, during the height of the fevered seller's market. 'We are having to lower prices and be willing to wait longer for buyers,' said Jill Chavez of La Quinta, who has invested in several east valley properties in recent years."

"In February 2005, there were 3,079 unsold homes on the market. This February there were 7,046. The median price for a new construction home dropped from $420,500 in December to $398,500 in January."

The LA Times. "Home builders figured they'd face cooling demand this year. But they're also facing another challenge: competing against some of their most recent customers. Speculators, whose robust purchases made 2005 one of the best years for new-home sales, have reined in their buying and started selling amid signs of a housing slowdown. The influx of their almost-new homes is making it harder for builders to sell brand-new ones."

"Even though builders have tried to limit investor purchases by prohibiting buyers from selling homes within a certain time, 'clearly they slipped through,' said John Burns, an Irvine-based building industry consultant. Orange County resident John Cullum is one such investor. He's trying to sell a new home he bought last year."

"Cullum recently listed a four-room house in the Riverside County community of Menifee that was completed in October by privately held builder Van Daele Homes. It has never been lived in and is listed at $460,000, a price that he believes is competitive with yet-to-be-built models nearby that are being peddled by other building companies. 'There's so much new construction in this area,' said Cullum, who said he received more than 100 inquiries in recent weeks. But his house is still not in escrow, and Cullum acknowledged that demand seemed slow."

The Orange County Register. "A slowdown in homebuying continued through January in Orange County, causing inventories of unsold homes to rise. Unsold inventories hit their highest level in seven years. It would take 8.9 months to sell all the homes on the market in January, CAR reported. The last time it took longer was November 1998."

"Meanwhile, Irvine-based Standard Pacific Corp.reported Tuesday that its new-home orders dropped by 13 percent in the year ended Sunday. Buyer demand didn't match 'the unsustainable pace of the past few years,' the company said."

"The firm reported that new-home orders were down 24 percent in Southern California 'due to a softening in buyer demand, most notably in San Diego and, to a lesser degree, in Orange County,' a company statement said."

The Santa Barbara News Press. "Home sales and price gains across Santa Barbara County flattened in January, perhaps setting the tone for what many say will be a relatively soft year for the local real estate market. Sales of South Coast homes fell by 16 percent last month. Although the downpours and floods of January 2005 were cited as slowing sales last year, the mild weather of the recent January did little to boost buyer interest."

"'In January a year ago, we had the El Nino rains that got into the way of showing homes. So compared to that, you would think that January this year would have been better for sales,' said Mark Schniepp. 'But sales were down, and it looks like February will be down, as well.'"

"In January, Santa Maria posted a median of $419,500, a rise of just under 5 percent from a year ago. Sales were basically flat. The Santa Ynez Valley reported a decline in its median price to $810,000 in January, compared with $865,000 a year ago."