The Morning Call has this report from Pennsylvania. "In June 2005, many homes on the market in the Lehigh Valley drew competing offers and sold in a matter of weeks, if not days. A year later, it's a different story. Homes are staying on the market longer, the rate of year-over-year appreciation is shrinking and the number of homes offered for sale is soaring, creating a glut in some areas."

"The number of existing houses sold in Lehigh and Northampton counties fell 7.5 percent compared with June 2005. 'It appears the slowdown has started,' said Bethlehem economist Kamran Afshar. 'A year ago, people were saying the best thing to invest in is a house. I think people are still saying it is a very good thing to invest in. But as time goes by, it will regain its status as it always has been, one of many things to invest in.'"

"Real estate agents say they have to market properties harder than they did last year, when often merely listing them was enough to entice buyers. Agents are now counseling sellers not to overreach when setting their asking price. In some cases, sellers have had to cut their initial listing price."

"Gary Elbert, a real estate agent in Allentown, said that once buyers see homes are not selling, they realize they have options. 'It is becoming evident buyers are being more discriminating in how they are evaluating the asking prices and the properties,' Elbert said. 'We are seeing some ridiculous asking prices.'"

"The time on market is lengthening largely because many more homes are for sale. In May, a record 1,611 new listings were recorded. In June, the total number of homes for sale, including new listings, rose 41 percent compared with the previous June. 'When you look at the numbers, it is just skyrocketing how many listings are being offered,' said Afshar, the Bethlehem economist. 'My guess is that will further put pressure on prices to go down.'"

"While listings grew, pending sales, a measure of future house closings, fell 7.7 percent last month from the same period last year. It was the second month that pending sales fell."

"People are also becoming wary of non-traditional mortgages such as those that charged only interest in the first years. 'Previously, people were jumping into buying houses, using adjusted-rate mortgages, because they could buy more house for their dollars,' said Ryan Sweet, an economist in West Chester, Chester County. Now, Sweet said, 'first-time home buyers are being crowded out, because they can't afford these exotic mortgages.'"

"Economists say there is no danger the Lehigh Valley housing market will crash. Even if home appreciation continues to slow this year, the gains of the last few years won't be rolled back. And the gradually slowing rate of appreciation resets the meter to 'normal,' experts say. 'At this point, it appears to be a very healthy correction,' Afshar said. 'This does not concern me. This is somewhat welcome.'"