The Boston Globe reports from Massachusetts. "The new home and condo market may be hit hardest by the softening of the Massachusetts real estate market. There's a glut of new construction on the market, and would-be buyers are struggling to unload their own current homes. And that slowdown is pinching developers."

"When Beth Shelburne and her husband moved to Boston from San Diego earlier this year, they (were) pleasantly surprised to find developers desperate to fill empty buildings practically fawning over them. The Shelburnes put in a low-ball offer on a penthouse condominium in Jamaica Plain priced far above their price range. Not only did they get it for $34,000 less than the $500,000-plus asking price, but the developer agreed to pay six months of condo fees worth more than $2,000."

"For good measure, he threw in a sleek plasma television. 'You've got these six beautiful condos going to be ready in August and none of them had sold,' Shelburne recalled. 'We felt like we were able to call the shots. We looked at so many places that were sitting there empty.'"

"Home shoppers leery of getting stuck with two mortgages or expensive bridge loans also have been a problem for Sharon agent Dave Wluka, president of the Massachusetts Association of Realtors. He said he's struggling to find buyers for a new subdivision in Plainville consisting of 81 single-family homes in the mid-$500,000 range. 'The reluctance I'm getting is, `I'm afraid I won't sell my house,' Wluka said. 'People are afraid, and rightly so.'"

"The Toll Brothers Inc., builders of suburban McMansions, recently laid off workers at its Estates at Walpole, a large development of homes priced in the mid-$600,000 range. A Toll Brothers development of a dozen luxury Wellesley homes priced around $1.3 million has finally sold most of the units after the company aggressively slashed prices, (broker) Elaine Bannigan said."

"'Those prices tumbled,' Bannigan said, noting one property sold after 495 days on the market at $578,500 less than the original $1.7 million asking price."

"In Worcester, formerly optional features such as hardwood floors are becoming standard, said Guy Webb of the Builders Association of Central Massachusetts. 'I haven't heard of anybody in the desperation phase yet, but it certainly has slowed down, and it's taking longer for them to sell something,' Webb said."

The Providence Journal from Rhode Island. "The foreclosure auction was scheduled for 9 on a Thursday morning at the small, Cape-style house on a country road near Putnam Pike in Chepachet. The house appeared to be vacant. A for-sale sign was on the front lawn, surrounded by tall weeds."

"Jeff Craig, of Commonwealth Auctions, in Newton, Mass., was waiting for a call from Wells Fargo Bank, which held the mortgage that was in default. Ken Robertson, of Glocester, was waiting to see whether he could pick up a bargain."

"The two men had met a few times before, in similar circumstances. There has been 'an enormous amount' of foreclosure auctions in Rhode Island in recent months, Robertson said."

"Robertson said many defaulted mortgages issued in 2005 are higher than the market value of the property in question. Many people were mortgaged to the hilt in the past few years, and it didn't take much to push them 'over the edge' into financial distress, he said. The foreclosure rate in Rhode Island for 'subprime' mortgages appears to have increased 150 percent since last year, more than any other state in the country."

"'We've been busy,' said Sal Corio, owner a Warwick auctioneer. Corio is handling the auction of 19 condominiums in Pawtucket on Sept. 30. The units, formerly apartments, were recently renovated in a conversion project. The minimum bid will be $87,500 per unit."

"Joseph DeAngelis, a lawyer representing the condo owners, a group of investors, said the renovation was completed four or five months ago and the units went on the market for $99,900. 'It's surprising to everyone that they're not selling,' he said."

"Corio said many of the 100-percent-financed house loans of 2004 and 2005 are the 'upside-down mortgages' of today, meaning the outstanding loan exceeds the market value. 'These mortgages written in 2004, 2005, 2006, they haven't even made a payment yet, or they made one or two payments. There's no equity,' Corio said."

"'In the late '80s, we were doing a lot of real estate. Foreclosures were quite plentiful, which we're seeing again today,' he said."

"Jerome Manning CEO of JJ Manning Auctioneers of Yarmouth Port, Mass., on Cape Cod, said he was headed to Naples, Fla., to sell real estate; this time, a large group of properties. Things are tough in Florida, he said, but 'there are real estate issues everywhere.'"