The News Democrat reports from Illinois. "Local home sales numbers are down throughout most of the metro-east, and for the first time in many years, prices are starting to fall. Chad Doyle, president of the Belleville Area Association of Realtors, said that adjustable rate mortgages, or ARMs, are hitting their 3 percent caps. He said consumers have been affected by subprime lending and adjustable rates."

"'The loan officer doesn't ask you if you go to the grocery store, if you go to the movies or do any activities,' Doyle said."

"'The bubble has burst,' said economist Peter Morici. 'Interest-only mortgages were a time bomb,' Morici said. 'They were the first to go off when the housing market slowed because lots of people were betting on perpetual appreciation. The people were betting the market would keep going up because they weren't paying off any of the debt. Some of these folks are faced with the prospect of their home values declining.'"

The Chicago Tribune. "For farmers eager to sell land for development, the phones have fallen silent. An unseasonable chill has settled over the housing market, and farmers and middlemen who were waiting for deals that would yield bundles of money have been left holding the bag, said real estate consultant Steve Hovany."

"'There have been some cries of agony as buyers renege on agreements,' he said. 'National builders have sold off some land as a way to make their bottom lines look better.'"

"Farmer David Bengtson says the market for those seeking to sell their land 'appears to be just about dead. Everyone has pulled in the reins. It was so crazy for several years that a downturn had to happen.'"

"Not far south of Joliet, realty agent William Arbaugh said a multimillion-dollar deal to sell 400 acres of farmland fell apart earlier this month. 'The buyers didn't show up for the closing,' said Arbaugh."

The Indystar from Indiana. "Federal, state and local authorities received warnings, some dating back two years, about the Fishers man at the heart of a mortgage fraud lawsuit involving the foreclosure of scores of Indianapolis-area homes."

"Yet the operation continued, according to court documents and observers. Now several Hoosiers say they, too, got roped into the alleged scheme and insist that 400 homes is just the tip of the iceberg."

"One of Robert Penn's neighbors, Ed White, suspected Penn of mortgage fraud in his own subdivision. So, as a real estate agent, former mortgage broker and member of the homeowners association, he said he did some digging and reported Penn to the FBI and Argent Mortgage back in 2004. From the FBI, he said he got nothing."

"Larry Cowell, a partner in Kensington Carriage Homes in Westfield, said Penn bought 39 of the development company's 90 units. But only six now have tenants in them. While Cowell thought Penn's purchases would help Kensington sell all its units faster, now the empty houses are a hindrance to further sales."

The Missourian. "Take Scott Boulevard south to Thornbrook, or Nifong Boulevard west to Mill Creek Manor, or take a short drive to any of the new subdivisions surrounding Columbia, and you’ll see empty houses."

"It’s not that new homes aren’t selling. But 2005 brought a significant increase in newly built homes in Columbia, and there are just not enough prospective buyers to match the number of vacant houses. 'In general, every new subdivision probably has more new homes on the market than needs be,' said Brent Jones, a Columbia real estate agent."

"Developers haven’t sold off all the houses built during 2005, a year of record production. The city issued 1,239 permit applications for single-family residential construction in 2005, up from 743 in 2002."

''The number of new homes started last year was significantly higher than in previous years,' Columbia real estate agent Rob Wolverton said. 'The growth in sales didn’t keep up with the growth in production.'"

"While buyers in an overbuilt community enjoy lots of options and reduced prices, sellers face tight competition to win buyers. Each month, with another interest payment, the builder loses more money. And in a market where supply outweighs demand, the builder can’t pass that expense along to the buyer by raising the list price of the house."

"The result, Boone County real estate professionals say, is that the situation could squeeze builders out of the business. 'I think we’re having a correction,' said Brent Gardner, a real estate agent. 'I don’t think you’re going to see any experienced builders take it on the chin. It’s going to be the people who thought, ‘Hey, let’s make a lot of money.'"

"While some builders worry about an already saturated market, Andy McVey continues to build. He has five houses under construction, and says he plans to start at least two more before the end of the year. 'I’m starting another house down the street,' he said. 'I wasn’t going to start that until I had this one under contract. But I ... have a feeling this house is going to move.'" "

McVey has had trouble moving some of his houses in medium price ranges. He said he has lowered the list price of several of his houses from $204,000 to $199,000, hoping they will sell before the end of the year."

"'I do well the first part of the year, run to the end of summer,' he said. 'Then you’ve got a decision to make: Do I give a better deal and just try to sell it? I hate to lower prices,' McVey said. 'It’s not fair to the people who bought the houses at the original list price. But I saw a couple of builders go in and lower prices. There’s a point where I have no choice.'"

"C&C Construction scaled back its production to cut its losses in anticipation of a potential slowdown. Kas Carlson, co-owner of the company, said he could go the rest of the year without breaking ground on a new house. 'Unless something changes, we’re not going to gear up for next spring,' he said. 'If (the market) doesn’t turn around, when the end of the summer comes, we’re going to be sitting on all these houses.'"

"Carlson has co-owned C&C for nearly 28 years. He said he hasn’t seen a new-homes market this bad since the early 1980s. Carlson said one indicator of the glut in the market is the fact that work has slowed down for his subcontractors. 'They’re usually booked up two to three months in advance,' he said. 'They’re just out there beating the bushes for work. For my framer, it’s just day-to-day now.'"