Some housing bubble news from California. The LA Times, "Guy and Karen Vidal are experiencing something new as they try to sell the small Craftsman house they own in Silver Lake. Since listing it at $699,000 two months ago, they've reduced the price twice, first to $679,000 and then to $659,000 a couple of weeks later."

"The problem for the Vidals is that after several years of frenzied bidding, buyers are also determined to turn back the clock. 'Buyers don't have that panicked feeling: 'If I don't buy before the post goes up, I'll get into multiple offers and lose out,' said (RE offcie manager) Ron Tornell. In his area, Tornell said, there were roughly 900 houses and condominiums on the market at the beginning of May, up about 25% from last year."

"The people the Vidals bought from acquired the house in October for $400,000, turning a quick profit of $125,000 before agents' fees and taxes. Guy Vidal says they spent more than $60,000 to restore the Craftsman. The Vidals' agent, Lyn Bradford, believes it would have sold quickly a year ago. 'People are taking their time; there's a lot of fence-sitting going on,' Bradford said. 'There's no doubt the market feels flat.'"

"'As soon as we bought it,' Guy Vidal said, 'the market changed.'"

"Another recent buyer who has seen the market change is Matthew Zevin, who lives in San Diego's Carmel Valley neighborhood. Sometime last fall, however, Zevin noticed a pronounced slowing. 'It was drastic,' he said. 'There was suddenly a lot more inventory, and with more inventory, prices started dropping.'"

"The Zevins paid $1.5 million in November for a 3,800-square-foot house. Coincidentally, they had bid $100,000 more for this same house in July. The sellers had rejected that offer, which was contingent on the sale of the Zevins' home. 'If we were buying it today,' Zevin said, 'we'd pay even less.'"

A San Diego realtor. "This is getting awfully repetitive, inventory continues to climb and demand continues to fall. As of this writing inventory is 19,380 homes."

"If you remember March Pending sales were 3,176 which I thought would bring April in around 3,000, down 27% from April 05. However, April sales were 2,570, down 38% from April 05's 4,136 sold homes. One could make a case for increasing downward percentages. For the past 8 months each month has had an increase in the percentage decline in market sales."

"The decline in sales is across the board. The under $500,000 sales are down by 44%, the $500,000 to $800,000 sales are down by 35% and the over $800,000 sales are down by 24% from last year."

"All the incentives being offered in the marketplace hide, a bit, what is happening to prices. If the market decline continues in the 30% to 40% region and inventories remain above 6 months these pricing levels can not be sustained. In order to take advantage of this market, Sellers need to have marketing programs that stimulate demand for their home."

The Sacramento Bee reports on some incentives. "Looks like the real estate market really is cooling off. To the point where one luxury home seller in a neighborhood full of Kings and politicians is offering buyers a free Mercedes and a year of massages."

"The once-hot housing market has 'normalized,' says selling agent Jade Phung. To sell pricey homes, realtors have to 'step up their game,' she says. In this case, the owners are throwing in their 2004 Mercedes E320 and an existing contract with a masseur who gives monthly massages at the home's pool-side cabana."