The Tracy Press reports on a return to the old days in California. "To woo an ever-dwindling number of well-heeled buyers to developments like Mossdale Landing in Lathrop, builders of new homes are offering incentives such as swimming pools or $20,000 in free upgrades."

"In the Bay Area, some developers are even offering new cars, said Susan State, owner of a monthly insider's look at the Bay Area and Central Valley housing markets. The one thing they have yet to offer is lower prices, State said."

"'If pricing doesn't come down, we're going to have houses that don't sell,' said real estate agent Sid Reams."

"There are 12,000 new homes planned for the Central and Mossdale-areas of Lathrop, and that has agents like Reams concerned. In some cases, developers are offering incentives of $30,000 or more for upgrades, said (broker) Jim Muthart."

"But incentives are only a temporary solution to a deeper problem, Reams said. 'Incentives can work in the short term,' he said, 'but you have to help buyers with lower prices and lower monthly payments. Prices have to come to at least 10 percent.'"

"'If not, he said, foreclosures are sure to continue to grow. Since the start of last year, there have been 404 foreclosures in Manteca and Lathrop."

"Reams warned that prices are too high for new buyers and investors. Meanwhile, inventory is booming. There are more than 300 homes for resale in Manteca and 102 in Lathrop. People are waiting for the price bubble to burst, or looking for cheaper homes, Reams said."

"That's good news for Pulte Homes in Mountain House, which sold 48 town homes in the Cambridge Place section of Mountain House last month alone. At $300,000 and $400,000, they're affordable enough for first-time buyers or investors. With high prices, the new-home business relies on well-heeled buyers from the Bay Area. At the moment, there just aren't enough of them to absorb the inventory."

"In the meantime, buyers are foregoing pricier new homes and even second-guessing the half-million price tags on older homes for resale, prices that sellers knew they could get in the boom times. 'We've gotten spoiled over the last few years,' State said."

"Manteca-based real estate agent Cheryl McFall agreed. 'We're done with the market where you stick a sign in the yard and the property is sold,' she said. 'It's kind of like the old days.'"

The Record Spotlight. "Home sales in Shasta County dropped from 574 in the first quarter of 2005 to 365 for the same quarter this year. Shasta County mortgage banker Darrin Johnston said sales are down because not as many speculators are buying homes in the area."

"'Investor participation has dropped due to the increase in (mortgage) rates,' said Johnston. Redding was a hot spot for housing speculators last year, with 22 percent of all homes sold in the area going to investors, according to LoanPerformance. For the first two months of 2006, 19 percent of all homes sold in Redding went to investors."

"Foreclosure activity in Shasta County jumped from 78 homes in the fourth quarter of 2005 to 93 in the first quarter of 2006. Mortgage specialist Tina Parisotto surmised that speculators who helped Redding lead the nation for much of last year in the percentage of homes sold to investors, could be the problem."

"'If they don't have any equity and they can't rent for what their monthly (mortgage) payments are, I could see those (investors) going into foreclosure quicker than the people who own a home,' said Parisotto, who is president of the California Association of Mortgage Brokers Greater North State Chapter.