The Rockford Register Star reports from Illinois. "Home sales plunged in September compared with the same month in 2005, the third straight month of declining sales in Boone, Ogle and Winnebago counties. September’s falloff was the largest in terms of percentages in more than five years, according to preliminary statistics from the Rockford Area Association of Realtors."

"Real estate agents sold 615 houses in the Rock River Valley in September, down 12.9 percent from the 706 sold last September. The decline occurred even as the number of houses available continued to set records. At the end of September, the current listings rose to 2,852, 16 percent more than were on the market at the end of September 2005."

"'I’ve been watching as the inventory (of available homes) has climbed and climbed,' said (broker) Jon Krause of Rockford. 'There has been so much new construction and that’s pushed up supply while there’s a limited number of buyers. That’s giving the buyer a little bit of an advantage.'"

"Indeed, the average sale price was down as well. The September average sale price was $141,990, down 2.7 percent from last year. The average price has declined year-over-year four of the past five months."

"The numbers were weak across the board. Existing- home sales were down 12.7 percent, while sales of new homes fell 13.4 percent. Sales of homes in the Rockford School District fell nearly 20 percent from last September."

"'The air came out of the balloon, finally,' said Jim Barbagallo, president of the local Realtors association. 'It’s a little bit of a return to normalcy.'"

The St Louis Post Dispatch. "Zella Harrington and her husband, Melvyn, love their West End home but wish they would have sold it two years ago. That's when nearby homes similar to their three-story, six-bedroom house were selling for $400,000 to $500,000. But sales have since slowed."

"The Harringtons have had their home on the market for five months without a bite, despite a couple of price reductions. It's listed at $365,000. 'I think it's worth more than that, but of course I'm biased,' Zella Harrington said." "Economists and real estate people say home sales locally and nationwide are starting to slow, forcing sellers to lower their profit expectations and patiently wait for the right buyer."

"'Expectations are catching up to reality,' said Rik Hafer, an economist at Southern Illinois University Edwardsville. 'Housing prices are going to retreat a little bit, but even if they retreat a little bit, they're still going to be appreciably higher than they were five years ago.'"

"'You hear a lot about prices falling. I don't really see prices falling, but I don't think sellers can be as aggressive on asking prices,' said Mike Travaglini, branch manager at Coldwell Banker's office in south St. Louis County."

"Most people won't be caught in a crunch, but some will, and home foreclosures could rise as a result, said Richard DeKaser, chief economist at National City Corp. in Cleveland. 'People were buying homes that might have been a stretch, but they started to factor in the belief that housing prices would not only sustain but increase,' DeKaser said."

"Gail Farwell, the Harringtons' real estate agent, said the heightened interest in home buying a couple of years ago created a market where some properties sold for more than they were worth. 'I think the market is really just adjusting,' Farwell said."

"Three years ago, Farwell helped a client buy a home in a bidding war in which he had to offer more than the asking price. Now the client is trying to sell the home, she said, and he is having a tough time making his money back."