MarketWatch has this report. "A growing percentage of U.S. housing markets are "extremely overvalued" and are at risk of falling prices, according to a study based on government data released Monday by Global Insight and National City. In the first quarter, 71 housing markets, representing 39% of all U.S. housing, were deemed to be 'extremely overvalued' based on median sales prices, median income, population and historic values."

"That's up from 64 markets accounting for 36% of housing in the fourth quarter. In the first quarter of 2004, just 1% of housing was considered overvalued. When prices do fall from overvalued levels, they typically fall by about half the overvaluation, (economist) Richard DeKaser said. The correction usually takes three and a half years."

"California and Florida accounted for 17 of the top 20 overvalued markets, economists at the two firms said."

From Inman News. "The number of existing homes listed online for sale in the largest 100 metro areas in the nation grew 60 percent from May 2005 to May 2006, according to an analysis of homes listed online at the Realtor.com property-search site."

"The survey, conducted by Corzen, a real estate research firm based in New York City, found that the inventory of homes listed in these metro areas grew from 1.3 million in May 2005 to 2.3 million in May 2006."

"Median list prices were up 8.4 percent from May 2005 to May 2006, while 'in some parts of the country … median asking prices showed steep declines, a clear sign of softening with the real estate market,' Corzen announced today. List prices for existing homes dropped most in Florida, California, Massachusetts and Washington, D.C.-area suburbs in Virginia, Corzen also reported."

"Charles Thibault, who conducted the county-by-county analysis, said, We do see significant decline in asking prices in certain counties, where the volume of available properties online has increased as much 400 percent. Thibault also reported that 75 percent of the counties in the company's sample showed no change or increases in prices, suggesting that asking prices in overall market are not in a downward cycle … yet, he stated."

From the Associated Press. "Low-ball bidders, persnickety buyers and cancellations are now the rule in once-hot housing markets."

"Rising interest rates and sky-high home prices have cooled real-estate investment, 'particularly in high-end markets in some juiced-up parts of the country where speculation was most rampant,' said (economist) Mark Zandi."

"Ara K. Hovnanian, CEO of homebuilder Hovnanian Enterprises Inc. said that real estate investors 'have largely pulled out.' 'Investors were a bigger part of the market than many thought, including ourselves,' said Hovnanian, whose company builds primarily in the Northeast. Would-be flippers are not only not buying new properties, they're selling what they already own, adding to the record number of homes already on the market."

"In suburban Philadelphia, where the inventory of unsold homes has soared, Zandi asked an agent months ago how anyone could get a mortgage for a home listed at $3.2 million. 'They were almost snooty,' he said. 'The girl said, 'People who buy these homes buy with cash.' The house is still on the market, now listed at $2.8 million."

"Most observers say housing prices will only slide dramatically if the Federal Reserve continues to raise interest rates. If it passes 7 percent, 'then things get very tricky,' Zandi said. 'Many home owners will have trouble making payments. We'll see significant mortgage credit problems develop.'"

"'The higher mortgage payment may lead some overstretched owners to default on payments, adding supply to an already glutted market,' said Mario Ricchio at Zacks Investment Research."