The Auburn Pub reports from New York. "The 'For Sale' sign that still hangs in front of a home on North Marvine Avenue in Auburn has sat through this year's spring rains, summer heat and fall foliage. Finally, five months after the three-story home went up for sale its sale price dropped between 10 and 12 percent."

"'It's been hard to do comparative market analysis based on 2005 sky-high prices,' agent Sandie Commesso said. 'But falling prices are better for sellers and buyers because they are more realistic prices.'"

"While NYSAR's numbers may indicate otherwise, some agents said they've noticed a dip in prices. Shawn Murphy, a real estate broker, explains that since 2005, house prices locally are slightly falling because home sale prices are beginning to exceed the average county income. 'The reason for the house price slip is not economic,' Murphy said. 'House prices have outpaced the average person's income for so long that there is now an affordability problem.'"

"'If people want to make their houses available quickly, they are now dropping the prices,' Murphy said. 'Right now buyers are in stronger positions to negotiate because there are less people buying homes,' he said."

The Patriot News from Pennsylvania. "If the housing market nationwide is a bubble bursting, the picture in central Pennsylvania is of an oversized balloon slowly losing air. The region does feel the effects of falling house prices and sales elsewhere."

"Bernie Campanella, sales manager in Swatara Twp., said the company's 15 percent drop in sales of new homes compared with 2005 is partly because prospective buyers can't sell the houses they own elsewhere. 'I have had three buyers, one from California, one from Florida and one from Virginia, unable to sell their houses. All three had to cancel,' Campanella said."

"There's also a psychological effect, said Doug Rebert, at Coldwell Banker. 'Potential buyers could be misled by all the national media attention that home prices are dropping,' Rebert said."

The Star Ledger from New Jersey. "Leah Belverio purchased a $190,000 home 18 months ago along with her boyfriend. When the couple split up, Belverio, determined to hold on to her home, became a serial refinancer. She dropped a 6.5 percent fixed-rate mortgage in favor of a ridiculously cheap adjustable-rate loan with a low monthly payment."

"To pay her bills, she cashed out nearly every dollar of equity in her Belleville, N.J., home. She was told, to wipe out nearly $50,000 in credit card debt, she could take out a new, bigger mortgage."

"Today, her initial $185,000 mortgage has ballooned to $247,000, perhaps more than her home would fetch on the market. And her monthly payment has skyrocketed from $1,375 to almost $2,000, and might go up even further in two years when her 10 percent 'teaser rate' adjusts higher."

"'I'm trying to keep my head above water with everything, my mortgage and bills,' Belverio said. 'I'm the type of person, I don't look that far into the future.'"

"All those Cinderella loans that enticed home buyers with the promise of low monthly payments during the housing boom are starting to turn into pumpkins. Financial experts now fear the same loans that helped many home buyers realize the American dream are going to land some of them on the street."

"What worries experts like Christopher Cagan of a California-based mortgage research firm, are all the adjustable-rate loans made in 2004 and 2005, at the tail end of the housing boom. 'This will fall on a slice of people and a slice of lenders and investors, and that slice of people will get stung badly,' Cagan said."

"Oftentimes, borrowers end up digging themselves deeper. Both times Belverio refinanced her home, for example, she sucked more equity out and racked up tens of thousands of dollars in credit card debt, hurting her chances of qualifying for a better loan down the road."

"As the housing market was beginning to boom a few years back, contractors working for Kara Homes were impressed by the developer's 'gold punch list.' The marching orders came from the top, as the company's founder, Zuhdi Karagjozi, was often on the scene at Kara building sites across New Jersey, making sure the work was done right."

"That same year, Kara Homes was recognized by Builder magazine as the fastest-growing homebuilder in the country, and Karagjozi was predicting his company, which had barely $1 million in revenue in 1999, would hit $1 billion by 2006. Then the bottom fell out."

"Suddenly, contractors working for Kara saw their payments go from weekly to bi-weekly, until they had to go to Kara's offices in East Brunswick to get paid. Work at 21 developments across the state stalled, then stopped altogether. The company, which once employed hundreds, had shrunk to a skeleton staff."

"And the 'golden punch list' was no longer so golden, contractors said. 'It was get them up, throw them up,' one contractor said. 'I don't care if the punch list is 100' things wrong.'"

"By late August, even the Porta Johns started disappearing from construction sites, a sure sign, the contractor said, the company was about to hit the wall. And so it did. Kara filed for Chapter 11 bankruptcy protection this month, becoming the biggest casualty so far of the dramatic change of fortune in the state's housing market."

"'The bankruptcy filing may suggest that the times were so good that Kara got way ahead of the game and took too much risk,' said James Hughes, at Rutgers University. But, he added, 'The situation with Kara probably reveals that there are more problems ahead.'"

"Even giant publicly held homebuilders such as Hovnanian Enterprises, based in Red Bank, and Toll Bros., which has put up numerous developments across New Jersey, have been squeezed by the market downturn."

"'They were very aggressive in acquiring some of the better land in New Jersey,' said Carl Goldberg, president of another large privately held homebuilder. 'But when you acquire those land assets aggressively and pay top dollar ... (and) the market begins to diminish, you don't have as much flexibility to cut price points to move inventory.'"

"Kara's general counsel, Patrick Turner, said rapidly changing market conditions were the main reason the company fell behind. 'It's hard to react instantaneously to market conditions when you get to be a certain size,' Turner said."

"For now, however, work at the developments, from Mount Arlington in Morris County to Mays Landing in Atlantic County, has ground to a halt, leaving communities half built and new home buyers wondering what will happen to their deposits."

"Mike Izzolo and his wife began to notice problems at their Kara Homes development this past summer. They had put $125,000 down on a single-family home in Mount Arlington. Izzolo noticed construction slowing at the development. He called Kara Homes and said they gave him 'all these excuses -- the contractors are some place else or we had to reschedule them.'"

"Izzolo contacted his lawyer to see if he could get out of the contract. But the lawyer told him he would have to wait until the November closing date passed. 'They have $125,000 of our money, which is a big part of our savings,' he said. 'And I have a hole in the ground.'"