The Associated Press reports on Massachusetts. "Massachusetts' housing market had its worst year in more than a decade, with sales and the median price for single-family homes dropping to levels not seen since the mid-1990s, a firm that tracks real estate transactions said Monday."

"Diana Grammont, who recently sold her four-bedroom home in Lexington, said she and her husband lowered their asking price multiple times during the seven months the house was on the market. Potential buyers, she said, were well aware of the recent downward trends."

"The only other option the couple would have been was to wait, possibly for years, for the market to recover. 'That was not something we considered,' said Grammont, now of Bedford. 'We were just, I won't say victims. It was just the way the market was when we were ready to sell.'"

"The median price, the point where half of homes sell for more and half sell for less, dropped 5.8 percent, from $345,000 in 2005 to $325,000 last year, according to a report by The Warren Group."

"That price had grown 12 straight years, beginning in 1994. 'You have to realize that that was a wonderful decade,' said Timothy Warren, CEO of The Warren Group. 'I think we have to take our medicine and realize that it can't go up forever.'"

"Buyers also have become more cautious, because they can't expect rapid increases in their property values, said Doug Azarian, president of the Massachusetts Association of Realtors. 'When the market was climbing, they knew they would see their investment climb,' he said. 'There was less concern about the price.'"

The Telegram. "In talking with Realtors, Mr. Warren said, there is a concern that any increase in foreclosures could put more housing on the market, exacerbating the situation."

"'If there are a lot of those, you’ve got distressed properties flooding the market,' he said. 'And not just those in foreclosure, but others who may be threatened and have to sell their properties. Banks are trying to make decisions whether to take them or let them go for less. In the early 1990s, banks owned a lot of properties they got stuck with.'"

"Also of concern is the amount of apartment construction in the market, he said. 'If you have a lot of apartments coming on, it tends to drive down rents,' said Mr. Warren. 'And that makes rental more attractive than buying.'"

"Homebuyers who financed 100 percent of their homes, or who used subprime loans that have low initial rates followed by years of increasing rates, could have a problem if they have to sell their homes. 'I’m concerned for those who bought a year or two (ago), particularly with toxic financing,' MAR President Doug Azarian said. 'They may owe more than the value of their property.'"

The South Coast Today. "The Warren Group's report said last year's single-family home sales fell 14.4 percent from 2005. There were 54,203 homes sold in 2006, down from 63,350 the previous year. The 2006 sales figure is also down 20 percent from the market's peak year in 2004, and the lowest since 51,032 homes were sold in 1995."

"The median sale price of a home fell 8.1 percent from November to $310,000 in December, the lowest monthly figure since March 2004, when homes sold for $299,000. 'What we're starting to see now, in talking to my agents in Southeastern Massachusetts, there are more buyers coming in,' said Ralph Grassia, VP for Jack Conway Realtors said. 'Now is the time to get in.'"

"Glenn Rapoza, co-owner of Gaspar-Rapoza Realty, expects to see home sales continue dropping for the next two to three months, but said they will be minimal and should level off by mid-year."

"'No doubt, I can see the median prices falling a bit because of the realization that the market has changed,' Mr. Rapoza said. 'It's part of the new reality. In order for sellers to sell and be competitive, they have to be focused.'"

"Mr. Grassia likened the market to being at the top of a pyramid, about to roll over into a plateau of moderation and consistency. 'This is going to be the year of stabilization,' Mr. Grassia said. 'There is good inventory. There are going to be buyers out there. They're not going to be shell-shocked and say, 'Oh my god, the market is overpriced.' They will continue to be educated consumers.'"

The Hartford Courant. "Hundreds of employees already furloughed by beleaguered Mortgage Lenders Network, including about 200 in Connecticut, will be laid off permanently. Layoff notices were sent, beginning late Friday, to about 830 furloughed employees in Connecticut and in four other states who worked in the lending division that the Middletown-based lender abruptly shut down on Dec. 29, the company confirmed Monday."

"In Connecticut, the layoffs this past weekend are in addition to another 100 job cuts made three weeks ago. The initial layoffs came just after problems surfaced in the lending unit. The 300 Connecticut layoffs reduce Mortgage Lenders' workforce in the state by 30 percent. It once had about 950 employees. Nationally, the company once had 1,800 workers, a number now cut in half."

"Mortgage Lenders is the latest company to get dragged down by problems in the 'sub-prime' mortgage industry, which has been slammed with rising delinquencies and defaults. What made matters even worse, the company priced some loans too low in October and was forced to sell them at a loss."