A pair of reports from Florida. "The residential housing market in the Pensacola Bay Area has been on a wild ride the past two years. Home prices shot up as much as 40 percent in just months. As of mid-July, buyers could choose from a record-breaking 6,500 homes in the Escambia and Santa Rosa markets."

"With 'new price' stickers becoming as common as 'for sale' placards in some neighborhoods, some builders have started offering attractive incentives to the buyers. Veteran Realtor Alexis Bolin says she has seen significant price reductions in the past few months and believes more are on the way."

"'We're definitely seeing builders with price reductions,' Bolin said. 'And it's not just one builder, it's several.'"

"'Part of the buildup in inventory is because the investor and (speculative) buyer have pretty much left the single-family market,' Al Muller, of Metro Market Trend said. Blaise Adams, president of First Gulf Bank, agrees, noting that at the height of the housing boom, builders would require as little as $1,000 in earnest money to take a house off the market. At that price it was easy for a speculator to walk away from a contract."

"'The quality of a $1,000 contract is pretty low on the scale of contracts,' Adams said."

"Another factor contributing to the high inventory, and drop in prices, is simple overpricing on the part of the seller. Joe Endry, of one of the largest real estate firms in the county, says of the 6,500 homes currently on the market, a large percentage are overpriced. 'When you get right down to it, probably one-third are not really on the market given the price they are asking,' Endry said.'"

"'Our rule of thumb is if the listing is 10 percent over market, it probably is not going to sell, and we would discourage our agents from taking those listings,' he said."

"While the housing markets the urban areas of Escambia and Santa Rosa are going through this 'adjustment,' the situation on Pensacola Beach and along coastal areas is grim, according to (realtor) John Panzino. 'On the beach there have been nine single family homes close since January of this year,' Panzino said."

"'That's terrible. It's strictly a buyer's market out there right now. There are 392 units for sale on the beach now, not counting the 92 lots for sale,' Panzino said."

The News Press. "Increasing numbers of Southwest Florida builders are going to the low end of the new-home market, betting that their spartan offerings will hit a sweet spot in a post-boom economy. Land is cheap, subcontractors are hungry and there's a glut of the expensive homes that were being churned out during last year's go-go real estate market."

"Now some local developers are willing to accept smaller profit margins to offer homes well less than $200,000, and that's a new phenomenon, said John McIlwain, at the Urban Land Institute. 'It's a natural response to a cooling market,' McIlwain said. 'They're moving back to people who are buying houses to live in rather than to invest.'"

"The median price of an existing home sold with the help of a real estate agent was $286,500 in May, down 11 percent from the all-time high of $322,300 in December 2005, according to the Florida Association of Realtors. Even with the lower prices, a typical house still is out of reach for many."

"Don Awrey hopes to sell his house in Lehigh Acres, build another one on a lot he owns next door, and perhaps 'come out with some cash in hand.' The dilemma, Awrey said, is that he's not sure what he'll get for his existing house because a glut of houses in Lehigh has sent prices down for the past few months."

"'I understand how a lot of speculators are going to be left holding the bag,' he said."

"It's not just houses and land that are more reasonable, said (developer) Jim Morrissette. There's no longer a shortage of subcontractors who do the nuts and bolts of building a house, he said. 'It's much easier to get your hands on the sub-trades now than it was even four months ago,' Morrissette said. 'They're more readily available' and willing to work for less."