The Orange County Register reports from California. "Jeff Lazerson, president of Mortgage Graderin Laguna Niguel, said weakness in the housing market and lending industry will force lenders to cut rates by summer. 'Realtors are starving right now,' Lazerson said. 'There is not a lot of demand to borrow money here or anywhere in the country.'"

"The median price of a resale detached home in Orange County slipped in December to $692,980, said the California Association of Realtors. That's down $6,220 from November and down $9,310, or 1.3 percent, from a year ago. Leslie Appleton-Young, chief economist with the association, described the county's home prices as more flat than falling."

"'There's not a fire sale going on, but the market has definitely slowed,' she said. In December, there was 9.4 months' worth of inventory on the market, according to the association."

The Daily Bulletin. "Home sales were off nearly 41 percent in the Riverside/San Bernardino area in December 2006, a sign that a mixed price picture may be about to turn down."

"'Nobody really knows for sure what will happen in the housing market,' regional economist John Husing said. 'But my guess is that by the end of this year, we will see a price decline locally of about 5 percent. There is just too much inventory on the market,' Husing said. 'Whether it's overbuilding or homes in foreclosure, I think we'll be waiting all year to see supply get down to a reasonable level.'"

"Husing said a lot of would-be sellers have lost the stars in their eyes. 'I've got three different friends who have pulled their homes off the market,' he said. 'They got used to hearing what their home was worth and if they couldn't sell it for that, they didn't want to sell.'"

"'I think the only people selling right now are people who either have to move or who have financial problems from some of these crazy mortgages,' he said."

The Ventura County Star. "The frenzy phase when homes were swooped off the market in a few days has passed, but that might be a good thing for buyers. Sellers are becoming more realistic and lowering their prices after about a year of flattening in the market."

"'Trees don't grow to the sky; they have to stop sometimes,' Realtor Associate Janet Scarborough said. Motivated sellers often lower their asking price in order to sell. But some refuse, expecting prices to shoot back up in March, when the market tends to start to pick up. Don't count on it, Scarborough said."

"She initially listed her ocean-view Ventura home at $995,000, but since has dropped it $36,000."

"Mortgage defaults in Ventura County soared 204.2 percent on an annual basis in the fourth quarter of 2006, shooting past a historical average to the highest level in eight years."

"'It may be simply that lenders are sending out notices with a lot more zeal because of the weak real estate climate,' said Mark Schniepp, who tracks real estate through the California Economic Forecast Project in Goleta. 'It's slightly surprising they ran up this fast,' he said, but added that 'we don't see intended problems.'"

The Press Democrat. "American Home Shield is moving almost half of the jobs at its 200-employee Santa Rosa call center to other states, saying it is too expensive to operate a telemarketing facility in Sonoma County. The home warranty company, a major employer in Sonoma County for two decades, said Thursday it will move all 90 telephone sales jobs in Santa Rosa to call centers in states with cheaper business costs."

"Home sellers and real estate agents often purchase service contracts as a sales incentive for buyers. 'It was a very challenging year in real estate,' spokeswoman Susanna Weston said."

"'It's largely a reflection of real estate. They boomed during the boom. And now that home sales are down, it ripples throughout the economy,' said Ben Stone, executive director of the Sonoma County Economic Development Board. 'Obviously it's a setback.'"

"The job losses are another blow to the region's economy. Sonoma County has been losing jobs monthly since the middle of last year and the housing slump has contributed to the weakening."

The Record.net. "Mortgage default notices in San Joaquin County soared to a record high in the last three months of 2006, as statewide filings hit the highest level in eight years, a real estate information service reported."

"Lenders notified 1,293 county homeowners they were in default in the fourth quarter, nearly three times the 464 filings seen in the same period of 2005, DataQuick said."

"That was the largest number of default filings for San Joaquin County since DataQuick began tracking the data in 1992, said company analyst Andrew LePage. The slump in the housing market and downturn in home prices is the real culprit, LePage said."

"'There are always homeowners in financial distress ... even in a good economy, even in a good housing market,' he said. 'Now it manifests in default and, in some cases, actually in foreclosure, because without appreciation more of these people can't bail themselves out.'"

"Aggressive financing schemes may also be at fault, said Art Godi, principal of Art Godi Realtors in Stockton and former president of the National Association of Realtors. 'We said at the time that some of those wild loans were going to come back and haunt somebody,' Godi said."

"Coldwell Banker Grupe is handling increasing numbers of so-called short-sales, where homes are sold for less than the outstanding balance on the mortgage, said Jerry Abbott, president and co-owner of the Stockton brokerage."

"He warned, however, the short-sale transaction may carry a hidden cost. 'The government comes in after the sale and says, 'Well, the bank forgave you $40,000, but you're going to have to pay income taxes on that,' he said. 'There's nothing like kicking somebody when they're down.'"

From Scripps News. "The number of California homeowners who fell behind on mortgage payments more than doubled during the last three months of 2006. 'In some places, the builders got a little bit ahead of themselves and the speculators got a little bit ahead of themselves and now they're feeling the foreclosure pain,' said Scott Anderson, senior economist for Wells Fargo."

"California is experiencing a rise in defaults because so many people took out adjustable-rate mortgages, economists say. About 28 percent of loans in California are adjustable, more than in any other state, according to First American LoanPerformance. 'California has been tremendously dependent on adjustable-rate mortgage products,' said Anderson."

"'For a long period of time, California had some of best credit quality in the country,' said Anderson of Wells Fargo. 'We're now starting to see some of that unwind.'"