The Palm Beach Post reports from Florida. "Naples saw existing-home values fall 8 percent in September on 37 percent fewer sales, according to last week's Florida Association of Realtors report. The really confidence-shaking price drops in Naples occurred this month at JJManning Auctioneers' sale of 44 homes in the wealthy Southwest Florida enclave."

"Real estate analyst Tom Lawler looked up the first 15 properties' Zillow.com values and their sales histories. For those homes with 'not too silly' Zillow values and that had sold within the past few years, Lawler came up with some startling discoveries about the Naples market, where the median price of an existing home in September was $446,900, according to the association, down from $497,500 a year ago."

"Only one auction property sold for more than its last sale. On average, Lawler says, auction prices were down 28 percent from the last sales price. The home at 920 Forest Ave., which sold for $690,000 on July 22, 2005, sold at auction for $400,000. The home at 1848 Crayton Road, which sold for $950,000 on March 10, 2005, sold at auction for $625,000."

"A random check of all the homes auctioned suggests similar results for the rest of the properties, Lawler says. One reason there's currently more than a two-year supply of homes for sale in Naples, he says, is that sellers are asking 'unrealistic prices.'"

"'For those who have to sell, these results should be sending chills down their spines,' he concludes."

"Auctioneer Perry Diamond stood on the pool deck of the historic home in West Palm Beach's Flamingo Park and barked into his microphone. 'Looking for $600,000, do I have $550,000? $550,000? $500,000?' said Diamond. 'Let's kick it in at $500,000.'"

"'The auction is today,' Diamond said. 'You're going to buy it today, or it's going to go back to the seller.' Still nothing. Nevertheless, after 70 seconds of patter, Diamond declared that he had a $500,000 bid for a home that had been listed for as much as $725,000. 'We can consider it sold subject to seller's confirmation,' Diamond said."

"But there was no bid for seller John Neuharth to confirm. Neuharth waited out the auction at a friend's house, and two days later he said he was still 'totally confused' about what happened at the auction."

"Amid a slow market for home sales and a growing glut of properties, frustrated sellers increasingly are turning to auctions in search of quick transactions. Auctioneers hype the process as a way to build buzz and move homes in a moribund market. But as the failed auction on Oct. 14 showed, this marketing method is no magic pill."

"Longtime auctioneer Karlin Daniel of Stuart derides reserve sales such as Neuharth's as 'hocus-pocus auctions' that give the business a bad name. 'The worst part is, people go to the auction and say, 'No one bid. Auctions don't work,' Daniel said. 'I've heard that for 30 years. That's really damaging to auctions.'"

"Diamond, on the other hand, said he will 'never, ever' consider an absolute auction because of the danger that a $500,000 house would sell for $50,000."

"Palm Beach County and the Treasure Coast are no longer the booming sellers' markets they were between 2000 and 2005. The slowdown has caused an astounding 49-month supply of existing homes for sale in Palm Beach County."

"Last month, Palm Beach County and the Treasure Coast led the state in declining home sales and tied for the third-largest rate of falling home prices. That has led to thousands of frustrated sellers such as Neuharth looking at everything from auctions to value-range pricing to unload their home."

"Shortly after he declared the property sold, Diamond acknowledged that there was no sale. 'Sometimes you want to cry,' Diamond said while standing in Neuharth's dining room. 'Let me introduce you to one of those times.'"

"It's not uncommon for an auctioneer in a reserve auction to make a bid on behalf of the seller, Daniel said, and Diamond said he declared the home sold simply to save face for the seller. 'All I was trying to do was to protect the price of the home,' Diamond said."

"But the disillusioned seller was upset that his auctioneer went ahead with an auction when only one bidder showed up with the requisite check for $25,000. 'I am not pleased,' Neuharth said. 'There shouldn't have been an auction because there was only one registered bidder.'"

"Diamond's auction partner planned to sell another house a block away from Neuharth's on the same day, but that sale fell flat, too. Sally Markman expected to auction that property, but she said an offer came in just before the auction. Markman canceled the auction, saying she didn't have enough bidders."

"Markman's client, Broward County real estate investor Dennis Bittner, said he rejected the offer for 915 Flamingo Drive because it was well below his $239,900 asking price. Markman even advertised the home as a 'pre-foreclosure' sale, although Bittner said he's in no danger of default."

"Sellers who want to strike a middle ground can try a 'minimum-bid auction,' which auctioneer Marilou MacKenzie recommends to sellers such as Robert Bono, who plans to auction his home next month. The minimum bid is $269,900, a little more than half the home's list price of $515,000."

"'It's a little frightening,' Bono said. Still, he hopes the auction brings a quick sale and gets him out from under his mortgage on the house, an investment property that's producing no income. 'Listing it is going to make it one of thousands,' Bono said. 'And I don't have a tenant in there, so it's costing me $3,000 a month.'"

The News Press. "Commercial real estate broker Frank D'Alessandro sent a shock wave throughout the residential real estate community by predicting, in his weekly News-Press column, that the residential market would not recover until the third quarter of 2008."

"Yet in a July 2005 column, in which I predicted that the housing bubble was about to burst, D'Alessandro disagreed with my assessment and was quoted as stating, 'While housing prices would be leveling off, the 5 percent annual population growth would be the key factor in maintaining current housing prices.'"

"D'Alessandro, who heads the largest commercial real estate brokerage in Lee County, admits that he was caught off base last year. 'With homes being grabbed up as soon as they came on the market, I assumed that future snowbirds, buying a second home, were major contributors to the boom. Instead it was speculators and, once the market showed signs of softening, they started to bail out, further depressing the market.'"

"This time D'Alessandro has more hard evidence to back up his prediction, pointing out that Realtor multiple listings have a huge overload of 12,654 single-family homes and 7,819 condominiums on the market at median sale prices far in excess of the current median sales price of $264,100 for homes and $237,500 for condominiums."

"This residential inventory does not include thousands of houses and condominiums for sale from a score of builders."

"(Realtor) Barbara Watt says that signs of renewed activity are already taking place, especially in Cape Coral, where prices are already down by almost 20 percent. However, sales figures throughout Lee County do not bear out Watt's optimism. While there are buyers waiting on the sidelines, they are waiting for prices to drop even further."

"Buyers are now leery about reducing monthly payments by taking out no-interest or adjustable rate mortgages that, during the boom period, accounted for nearly 30 percent of the mortgage business. Many families who purchased homes last year at peak prices, with little money down and without fixed-rate mortgages are now facing foreclosures."

"When will the market pick up? When prices begin to drop even more. And there is movement in that direction already from new-home builders who, feeling the pressure from heavy investments in land and infrastructure, still need revenues even if their profit margins have to be cut. Despite the glut on the market, they continue to build."

"Sunday's real estate section shows most builders either cutting prices on existing models, covering closing costs or offering free upgrades. However, most existing home sellers are reluctant to reduce their asking price significantly even though they should realize that few people are ever fortunate enough to sell at the peak of the market whether it is a house or a publicly listed stock."