The Associated Press reports on California. "Greg Sterbens thought his 3-bedroom, 2.5-bath home on a cul-de-sac in wine country was a great deal when he hung up a 'For Sale' sign two months ago. List price: $685,000. After a month without offers, Sterbens lowered the price to $660,000. Earlier this month, he reduced the price to $639,000, making it the cheapest house per square foot in his Sonoma County neighborhood."

"'We have to be competitive, and we can't be greedy,' said Sterbens, who is having a home built in Redding. 'It seems like people are afraid to buy now. They don't know where the bottom is.' Real estate agents and economists say Sterbens, and thousands of other sellers, may have to consider further reductions."

"Fresh data show that California's market is not immune, and may be on the cusp of a long-feared correction. 'I could see some continuing declines at least over the next 12 months,' said economist Stephen Levy,. 'Typically sellers begin to lower their prices, and that's when you worry that the bottom could drop out. We still haven't reached that point, but I don't see how the economy can continue with these prices.'"

"The median price last month in San Mateo County was $721,000, down from $773,000 a year ago. The median home price in Marin County last month was $803,000, down from $822,000 in August 2005. San Diego and Alameda counties also saw prices decline."

"'We've got sellers out there who have not adjusted to the new reality,' said (realtor) Carla Giustino. Giustino urges clients with homes worth $1 million or more to drop prices by $50,000 to $100,000."

"Broker David Schubb persuaded a client last week to lower the price on a home in the San Francisco suburb of Walnut Creek. 'We were exploring interest rate buy-downs, making the buyers' payments, even throwing in a new car,' said Schubb, who has been selling real estate for 37 years. Schubb said he's offering incentives he hasn't used since the stagnant 1970s. 'I'm not a genius who invented this stuff, it's what we used to have to do all the time,' Schubb said."

"The only upside is that many California towns have turned from unaffordable hamlets to buyers' markets."

The Fresno Bee. "A large supply of properties for sale continued to put pressure on prices, according to figures released Thursday. A total of 1,265 new and existing houses were sold in August in Fresno County, down 21.2% from August 2005, DataQuick reported."

"Joan Jolly, president of the Fresno Association of Realtors, acknowledged a tough market. More than 3,500 single-family homes are for sale in Fresno and Clovis alone, which is causing sellers to lower prices. 'The $300,000 to $350,000 price range is the one that has a ton of stuff on the market,' she said. 'Some have been reduced to sell.'"

The Press Enterprise. "Rates for 30-year mortgage rates dropped this week to the lowest level in six months, but the break for homebuyers may not be enough to buoy sagging sales in San Bernardino and Riverside counties, according to some real estate agents, mortgage lenders and a university economist."

"'It is going to help. But it is not going to make a significant change in the housing outlook,' said Esmael Adibi, at Chapman University. 'The interest rates have not gone down enough to make a difference because the (prices of) houses are still too high,' said Diana Nieves, an agent who covers Corona and Riverside."

"Real estate agents said despite lower interest rates and price reductions offered by more builders and private sellers, prospective home buyers are sitting on the fence, waiting for something more dramatic to stir them to buy."

"'A lot of buyers are saying they will wait until November or December until the sellers are desperate. Some think the economy is really going to get bad,' said Yvette Plautz, an agent in Eastvale."