The housing starts numbers are out. "The pace of U.S. home building fell more sharply than expected in August as builders broke ground on new homes at the slowest rate since April 2003, a government report showed on Tuesday. The Commerce Department said U.S. housing starts fell 6.0 percent n August to an annual pace of 1.665 million units, compared to a downwardly revised 1.772 million in July."

"Compared to a year earlier, August housing starts were down 19.8 percent from the August 2005 pace of 2.075 million units. Permits for future groundbreaking, an indicator of builder confidence, fell 2.3 percent to a 1.722 million-unit annual pace, the lowest in four years."

"The report came a day after an industry survey showed that home builder optimism sank for the eighth straight month in September to the lowest level in more than 15 years."

The Times Union from New York. "The housing boom ended more than a year ago, but sellers are having a tough time accepting that fact, says David Lereah, chief economist at the National Association of Realtors. The result has been tumbling sales as buyers stay on the sidelines."

"The expansion that began in November 1991, when mortgage rates fell into single digits, became a boom following the 9/11 terrorist attacks, when trillions of dollars left the stock market looking for a safe haven in real estate, Lereah said."

"This correction is different from any others because it wasn't triggered by a recession, high financing costs or job losses. With unemployment below 5 percent, mortgage rates still below 7 percent and a growing economy, 'all you need is a price correction, a price adjustment, to bring the market back,' Lereah told the crowd."

"The transition to lower prices is already under way nationwide, Lereah said, and will result in a more balanced market than the one that has been dominated by sellers. He said the Capital Region experienced 'a moderate boom' without the extreme price run-ups or overbuilding seen in parts of California and Florida. As a result, 'you don't need as much of a price correction,' he said."

"Lereah predicted prices will drop nationally over the next six months, and that each percentage point drop 'will bring thousands and thousands of buyers back into the marketplace.'"

"The downturn in the nation's housing market, including the Albany, N.Y, region, was necessary and will be temporary for the most part, according to Lereah."

"He predicted a rebound in the next three to six months in most parts of the country, provided the Federal Reserve doesn't start raising interest rates again. Some areas in the South and West will take longer to recover because the boom of the past five years was much sharper than in New York and other states, he said."

"The median price for a single-family house in San Francisco, for instance, is $740,000. 'Who can afford that?' said Lereah."

"J. Gregory Connors, president of the Greater Capital Association of Realtors, said agents have to educate sellers about the dynamics of the market and make sure they don't expect their houses will sell for as much, or as quickly, as they did 18 months ago. Doug Engels, president-elect of GCAR, said, 'This isn't a new market,' Engels said. 'It's a regular market that we haven't seen in a few years.'"

"Lereah said conditions were ripe for a market correction in August 2005 because interest rates had gone up by a full percentage point in the previous year, speculative investors began pulling back and many first-time home buyers were priced out of the market. 'This isn't a party with no hangover,' he said. 'This is not a prolonged, deep recession.'"