Two housing reports from the Virginia Pilot. "The field of dreams for Hampton Roads home builders has been reversed – if they don’t come, you won’t build. Faced with falling sales across the region, some builders are slowing construction, cutting prices and offering incentives unheard of in the recent seller’s market."

"The number of permits issued for residential home construction fell by nearly 22 percent in South Hampton Roads and Isle of Wight County during the first nine months of the year."

"'We’re going through a down cycle, that goes without saying,' said Vincent Napolitano, president of Virginia Beach-based Napolitano Homes, which has acquired 20 to 25 percent fewer permits so far this year. 'How long it’s going to last is anybody’s guess.'"

"New developments sprouted and thousands of new homes were built and sold at a blistering pace in Hampton Roads in the past few years. 'They were building to keep pace with the market we had a year ago, and it’s not there anymore,' said John Olivieri, president of the Tidewater Builders Association."

"Even in a slower market, builders are reluctant to drop prices, fearing it hurts the perception of their homes. 'We have not reduced our prices … and we don’t intend to,' said Tuck Bowie, president of Terry-Peterson Residential Cos. in Virginia Beach. 'That’s about the worst thing you could do. We’re not in the used-car business.'"

"Terry-Peterson has more than 1,200 units in the pipeline. 'We want to get slabs in the ground so, when the market readjusts, we’re in a position to capture as much of the market as we can,' Bowie said."

"Still, prices have come down on some new homes. On Tuesday, agent Joan Revell was preparing to drop the listing price on a 3,900-square-foot home in Chesapeake’s Edinburgh development to $799,000 from $838, 000 . The price had already been cut from $858,500 'just to get it moved,' she said."

"A sign in front of one massive red-brick Edinburgh home on Sunday advertised 'closing costs paid.' Builders have offered to pay closing costs and give $10,000 in options at Chesapeake’s Riverwalk Estates condominium development, and they’re throwing in stainless steel appliance upgrades at Graystone Reserves in Suffolk."

"The incentives from builders are 'pretty huge,' said Lee Halyard, who owns a Chesapeake real estate agency. 'The ones that have inventories sitting, that’s a pretty big nut to pay down.'"

"The number of home-shoppers in new developments is about 30 or 40 percent lower than it was last year, Bowie estimated. Prospective buyers think they can get a better deal by holding out, he said. 'Until that perception changes … you’re not going to get the traffic.'"

"A major cause of the current slowdown in new-home construction is the difficulty home­owners encounter as they try to sell their houses and move up to new ones, said Rip Montague."

"'You’re dependent on a continuous supply of buyers who, up until this point, had been able to sell their houses,' said Montague, who has a stake in a company that renovates homes for resale. 'But those prices continued to rise, and they got to the point where the mid-income buyer started saying, 'Wait a minute.'"

"Developers and buyers in Hampton Roads have poured millions of dollars into condominiums, a market known to fluctuate wildly with real estate cycles. Some warn the pace of development is a sign that the market is overheating, but building continues."

"There are about 1,500 condos on the market, according to the region's MLS. There are 'signs of overbuilding relative to anticipated demand,' particularly in downtown Norfolk, warned an Old Dominion University study released last month."

"'The problem in the condo market is they've already built up a lot of inventory, and now there's a lot of inventory waiting to come onto the market,' said ODU economist James V. Koch, the study's author."

"Developers of a planned condominium project on 21st Street in Norfolk decided to convert it to apartments. Known as 201 Twenty One, it was approved last week by the city's planning commission."