The Press Democrat reports from California. "New home construction in the Bay Area, including Sonoma County, will stay flat in 2007, according to a forecast issued Thursday by the California Building Industry Association. 'Last year, we said it's time for a breather,' said said Alan Nevin, an economist for the trade group. 'We're saying it again.'"

The San Francisco Chronicle. "In the Bay Area, where more than 30,000 condos are proposed or under construction, Nevin said he expects to see some projects tabled this year. There were about 1,200 new condos put up for sale in the city in 2006."

"Steven Delva, president of the South Bay division of Standard Pacific Homes. said Standard Pacific dropped prices 10 to 20 percent at its Bay Area projects last year. Price reductions were greater in other parts of the state, such as Sacramento, where new homes have flooded the market."

Inside Bay Area. "In 2004 and 2005 more than 200,000 homes were built each year to meet demand. That set the stage for a build-up of unsold inventory in the new home market, said Wes Keusder, a Southern California home builder and association chairman."

"The demand for new homes started dropping in summer 2005 in response to rising prices. 'The demand just cut off,' Keusder said. 'It was more like a stock market slump than a housing slump. That's what gave us a large overhang of inventory that we're burning off now. The decline was much more like a knife cut than in years past.'"

The LA Times. "The current rate of construction should be accepted as a 'new mentality' for builders, who pushed up the pace of building to near-record levels from 2003 to 2005, Nevin said."

"'That type of massive increase bent the industry out of shape,' he said. 'It caused lot and land prices to wildly accelerate, material and labor costs to skyrocket and trade contractors to throw away their standard profit-measurement tools.'"

The Union Tribune. "San Diego County's home-building industry entered the new year in 'slowdown mode' and will likely see the fewest building permits issued in a decade. The last time San Diego permits dipped below 10,000 was in 1996 at the tail end of the last major recession."

"Wes Keusder said the construction slowdown here and around the state seemed to be tied to high prices and chronic affordability issues. 'We have literally hit an affordability (constrained) market,' Keusder said, 'where even though we have low interest rates and (strong) demand and jobs, the prices got so high that it slowed down the market.'"

"Robert Rivinius, president of the building industry association, said the turnabout first showed up in August and September 2005. 'The world just somehow changed,' he said. 'I don't know why. It's like a memo went out and that changed it.'"

"Builders reported rising cancellation rates as buyers found they couldn't sell their current homes, Rivinius said. Then, new phases were delayed and options on building sites were canceled as builders walked away from planned projects."

"Nevin said he flew over Riverside County recently and was 'astounded' by the lack of construction activity. 'There are amazingly few new projects getting started,' Nevin said. 'We're just not seeing anybody, particularly on the condominium side, that has shown a willingness to go ahead.'"

The North County Times. "Independent economists suggest that Nevin's forecast is on the rosy side, and that fewer homes will be built. If the forecast is wrong, it won't be the first time. Nevin said last year's prediction was off by about 15,000 single-family homes statewide."

"'I think it's just going to be a weak year all around for single-family construction in 2007,' said economist Christopher Thornberg. 'It's not going to be until 2008 that we work through this inventory of single-family homes. I think we have massively overbuilt single-family homes, particularly in places like Riverside, San Bernardino, San Diego and Sacramento.'"

"Contrary to Thornberg, Inland Empire economist John Husing suggests that California has a housing shortage. 'In this last go-round, price took off because of a shortage of housing,' Husing said. 'But it went higher than it probably should have because speculators got in and bought houses and restricted the supply; 2007 is a time to redress that imbalance.'"

From ABC 30. "Andrew Fiber, and his wife Tonya of Fresno, started looking for their first home six months ago and they've noticed housing prices have dropped considerably since their search began."

"Andrew says, 'I think the housing market is about as low as it's going to be and it just seems like a really good time to buy.'"

"Fiber's Real Estate Agent, Tye Faria says since buyers know there are many homes to choose from, they're in no hurry to buy. 'People are holding off a little bit, but only because they're uncertain. No offense, but the media does hype up certain stuff and everybody says 'the bubble's gonna burst' - there is no bubble.'"

"Perhaps no bubble, but there are a lot of houses. In 2005, an average of 1800 homes sat on the market in Fresno at one time. Last month, 4800 hundred homes had a for sale sign out front."