A housing report from the Arizona Republic. "Valley housing analyst RL Brown said Chandler will see more high-density housing as well as developers building on the smaller lots they ignored before. Construction of high-density housing has begun. Condos are being built downtown and at Fulton Ranch."

"Not only are builders running out of space, but the glut of existing homes for sale has been dampening the market for new homes, said Hank Pluster, interim long-range planning manager."

"In recent months, prices have been falling or staying flat, depending on the area of the city, according to Realty Studies and Bill Ryan, a broker in Chandler. 'If you bought in mid- to the end of 2005, you probably have experienced a loss in value,' he said."

"As gasoline becomes more expensive, homes closer to the heart of the Valley have become more popular, as opposed to those in Queen Creek and especially Johnson Ranch east of there. 'The farther out you go, the harder they have been hit,' said Gina McKinley, a Chandler resident and real estate agent."

The East Valley Tribune from Arizona. "Developers took out 2,275 building permits for homes in December, a 55 percent drop from the same period the year before, according to analyst RL Brown. New home sales also sagged last month, down 26.6 percent from December 2005."

"'2006 activity will cause the industry to pause and rerecognize that housing in this market area has to be affordable,' Brown said."

"The dramatic run-up in prices during last year’s housing frenzy was not sustainable, he said. Home sellers will need to price homes according to today’s market or withdraw their listings, Brown said. Builders must also be more realistic if they plan on staying in business, he said."

"'I think 2007 is the year that everybody needs to be very careful and watch,' he said."

The Reno Gazette Journal from Nevada. "The median price of an existing single-family home in Reno-Sparks fell again in the fourth quarter, continuing a trend of falling prices and sales throughout 2006."

"During the fourth quarter, the median price fell to $314,250, down 11 percent from the same quarter in 2005 and down from $324,500 in the third quarter, according to the report by the Northern Nevada Regional MLS."

"And the number of sales continued to show weakness, slumping to 929 during the last three months of 2006. That's down 22 percent compared with the fourth quarter of 2005, according to the report."

"Reno, which has the most expensive homes of the three areas, had a median price of $375,000 during the quarter, down 9 percent for the fourth quarter of 2005. Sales in Reno fell 25 percent to 489 during the quarter, according to the report."

"Sparks' median price dropped 10 percent to $295,000 on 267 sales, down 17 percent. The North Valleys' median was $257,000, down 12 percent, while sales dropped 20 percent to 173 for the three months."

"'2007, we'll see some further weakness in prices mainly because people are getting squeezed by the creative financing that they used to buy some of these houses,' said Tom Cargill, economist at the University of Nevada, Reno. 'Though we're not near as bad as Las Vegas, there is still a speculative element here that has driven up prices.'"

The Wall Street Journal on Las Vegas. "As the number of borrowers falling behind on their mortgage payments climbs to the highest level in five years, the mortgage industry is trying new strategies to help bail them out. The rise in bad loans is leading to a pick up in so-called short sales. Sheldon Klain, a manager in Dallas, wound up saddled with loans on two homes last year and now is trying to arrange a short sale of one of them."

"Mr. Klain got into trouble after he moved to Dallas from Las Vegas to take a new job. He bought a home in Dallas, thinking he had found a buyer willing to pay $475,000 for his Las Vegas home. The sale fell through at the last minute and Mr. Klain found himself stuck with two homes and behind on payments on the Las Vegas house."

"Mr. Klain says his Las Vegas house is valued at $419,000, according to a recent bank appraisal, well below the $440,000 he owes on the property. 'The dump in the market put us behind the eight ball,' he says."

"There can be downsides for borrowers to short sales. Under certain circumstances, the debt forgiven by the bank may be taxable to the borrower. What is more, convincing a lender to go along with a short sale can be difficult, and borrowers who have a mortgage and a home-equity loan may have to negotiate with two lenders or two departments of the same bank."

"'There are all sorts of log jams,' says John Izzo, the agent handling the sale of Mr. Klain's Las Vegas house. Mr. Izzo says he is currently working on 19 short sales, but figures just 'one in five might be successful.'"