The San Francisco Chronicle reports from California. "The slump in the Bay Area housing market continued in December. The number of homes sold in December fell almost 20 percent from a year ago. The drop extends a streak of monthly sales decreases dating back to April 2005. 'I still think we're nearer the beginning or the middle of a longer correction,' said Stephen Levy, director of Palo Alto's Center for the Continuing Study of the California Economy."

"While many in the real estate industry say that the downturn in the housing market is over, economist Chrostopher Thornberg disagrees. 'I'm hearing all this nonsense about a soft landing and rebounding in 2007, and that's just incorrect,' he said. 'It just doesn't work that way -- housing cycles when they pop take years to clear out of the system, not months.'"

"In Santa Clara County, the median price of resale detached houses that sold last month was $710,000, 1.4 percent higher than a year earlier, but down from $734,500 in November. The median house price in the county also hit its high last year in June, at $770,000."

Inside Bay Area. "The number of homes in some stage of foreclosure in December continued to rise in the Bay Area compared with a year ago. In Alameda County, 720 homes were in foreclosure, almost four times the number of a year ago. In Contra Costa County, 461 homes were in foreclosure, or three times the number from a year ago. In San Joaquin County, 460 homes were in foreclosure, more than three times the number from a year ago, the report said."

"Earl Rozran, a Realtor (in) Pleasanton, said some properties in the East Bay have been on the market for six months. 'Some sellers have refused to make any price concessions at all,' he said. 'Yet they are surprised when there is very little showing activity or offers.'"

The Sacramento Bee. "Two months ago Mark Aizenberg and his wife fell in love with the 2,400-square-foot Arden Hills home and watched the price tumble from $745,000 to $699,000, then to $624,000. The Aizenbergs offered $575,000. Then came a $600,000 counteroffer. 'We said $585,000 and they said 'Yes,' says Aizenberg."

"Median sales prices were down 16.9 percent in Placer County from December 2005. Yolo County reported prices down 14.1 percent. Sacramento County prices were down 7 percent. DataQuick attributed much of the year-over-year declines to huge discounts offered by new home builders eager to clear inventory before year's end. Price cuts from $30,000 to $100,000 were not uncommon as 2006 ended."

"Analysts say rents have been held down by continuing oversupply of rental units after years of new apartment construction. Add to it the growing number of single-family homes now available to rent. 'A lot of people can't sell their homes, and they put them on the (rental) market,' said Bruce Mills, owner of Sacramento-based M&M Properties, a rental manager."

"Sales of apartment complexes and smaller units have slowed alongside the 2005-2006 slump in other housing. 'There are twice as many projects on the market now as last year, and they're staying on longer,' said Bruce Hester, a regional apartment broker. 'The market has definitely softened. The escrows are off 40 (percent) to 45 percent.'"

The Bakersfield California, "Home sales in Kern County were down 30 percent in December from the same month a year earlier, while foreclosures increased 37 percent during the same period, according to reports."

"The number of notices of default in the Bakersfield area has increased from 33 in December 2005 to 179 in November and 243 last month, appraiser Gary Crabtree said. He said notices of trustee sales are also up considerably."

"'What we are seeing is the direct result of the creative financing that has been put in place over the last three years by lenders,' Crabtree said. 'If we see a big spike in foreclosures, that's going to add more supply to the market.'"

"There were 3,181 listings on the market in Bakersfield last month, up 53 percent from December 2005, Crabtree said."

KABC Los Angeles. "Some Southern California landlords are lowering asking rents and offering move-in incentives, while vacancy rates are rising,- all signs the market may be softening, it was reported Thursday."

"'There's a point at which you push beyond where people can afford the price and you run into resistance,' John Husing, consultant in Riverside told The Times. 'In supply and demand terms, the sign that the price has gotten too high is when you start seeing vacancies go up in the rental market, and inventories go up in the housing market.'"

The Voice of San Diego. "The condo-conversion phenomenon in El Cajon came in a flash. The general housing slowdown of 2006 didn't leave El Cajon untouched. Last year, the council approved only about half as many projects , 641 units, as it had in 2005. And many of the projects that started building when real estate was sizzling finished construction just as the market had cooled."

"'We're saturated,' said local real estate agent Carol Carey, who's been selling mostly new construction in El Cajon for 20 years and now sells condo conversions. 'In El Cajon and across the county, we had a 'feeding frenzy' -- eventually we ended up with a glut,' said Jim Taylor, a member of the former condo-conversion oversight committee. 'I don't think anyone really realized it'd be as popular as it was.'"

The Pasadena Star. "California gained 723,000 jobs and built 851,000 homes from 2000 to 2005, a ratio of 0.8 jobs created for each homebuilding permit issued, said Esmael Adibi, at Chapman University."

"The long-term ratio of jobs to homes from 1980 to 2000 is 1.7, he said. 'We built too much for the job growth,' he said."

The Desert Sun. "Desert Hot Springs Councilwoman Mary Stephens said it's somewhat discouraging to see the slowdown in home sales, but she sees an upside. 'I'm almost thinking, 'Well, maybe it's kind of a reality check,' Stephens said. 'The (home) prices were getting so out of whack it would probably take three of my kids to buy a house.'"