The Times Dispatch reports from Virginia. "Gordon and Martha Mabey don't know their neighbors. But they don't have many any way. The Mabeys bought into the newly renovated Nolde Bakery Condominiums at Church Hill last fall. Now, some of the unsold units are for lease. 'It's better than cutting the sales price by umpteen thousand dollars,' said Gordon Mabey. 'We were told the units would not be leased unless it became necessary.'"

"About a third of the 77 condos sold, said Jason Dodd, VP of marketing for the developer."

"Nolde is not the only condo project struggling in the Richmond area. Inventory grew as investors tried to sell off property and more new condos came on the market. The Nolde condos were on the market for the low $200,000s to the mid-$300,000s. They are renting for $985 to $1,600 a month."

"'If it ends up that we spent more than it is worth, that is the luck of the draw, and we will have to live with it,' Mabey said."

"Several blocks away on East Main Street, a sign hangs from the newly finished Cutters Ridge at Tobacco Row: 'Apartments for lease.' These same 12 apartments, which look like town houses, were marketed for sale last fall as single-family attached row houses. They were on the market until January for $449,000 to $485,000. None sold. They are renting for $3,000 a month."

"'The good news for us is we only had 12,' said Kirsten Brinker of Forest City Enterprises, the developer."

"A total of 3,675 town houses and condos in the Richmond area went on the market in 2006, up 52 percent from a year earlier, according to the Richmond Association of Realtors. Meanwhile, the number of closings fell to 1,721 last year, down from 1,788 a year earlier. Another 161 condos will hit the market soon."

"New home construction is way down in the Richmond area. But that is good news, said David Lereah, chief economist for the National Association of Realtors. 'You want to see construction activity down when real estate is contracting so much,' Lereah said during a visit to Richmond last week. 'Richmond is looking a lot better than most areas of the country,' he said."

"Speculative investors, who got into the market to make a fast dollar, turned the recent boom into a frenzy, Lereah said. 'When lenders offered exotic mortgage loans, that was fuel for the fire.'"

The Record Herald from Pennsylvania. "Home prices are cyclical, but many in the business say the most recent downturn has been the worst in decades. Developers enjoyed a fruitful, above-average market in Franklin County for nearly a year. Building lots were plentiful, and the demand for new homes was high. But last spring, the market took a sharp turn nationwide."

"Ron Koontz of Creative Homes said he's accustomed to industry ups and downs, but this dip was severe. 'It's probably the deepest we've seen it. I've heard other developers say the same thing,' Koontz said. 'There were definitely layoffs because of the slowdown.'"

"'High cancellation rates, mainly due to people not being able to sell their current home, were a big factor in the decline of new home sales,' said Mark Boastfield, VP for Richmond American Homes. According to Boastfield, there was a nationwide slowdown in home sales in 2006."

"When prices go through the roof and developers get caught up in the market, there comes a point where the rush inevitably ends, Koontz said. Many buyers overshot what they could afford, Koontz noted."

"'First-time home buyers in the past several years were buying much bigger homes. Interest rates were down, and decisions were made on monthly payments,' he said. 'It was much bigger than they needed ... It scares me to think of foreclosures on these houses.'"

"He said a lot of people in the construction business are laid off right now, and developers are offering increased incentives to potential buyers."

"As prices have dropped, Dan Ryan Builders' Gil Ohler said the profit margin has definitely suffered. Last year, the company was building 12 to 15 homes at time. Now, they've had to close two of four local offices and lay off workers, he said. 'It was pretty major, pretty quick,' Ohler said."

The Herald Leader from Kentucky. "Snowmen lined Lexington's streets in past winters; this year it's For Sale signs, often in front of vacant houses."

"The signs have been multiplying since last summer when the national housing slump arrived in the Bluegrass, and even the most optimistic of forecasters say this unwanted visitor is unlikely to leave before next summer."

"Falling prices and weak demand can be good news for buyers, but sellers face long delays and financial stress. 'You just have to wait and see what you get,' said Kate Blair, who has been trying for about a month to sell her house on White Chapel Circle in Andover Hills for $235,000. Their four open houses have attracted a few people and they've had some nibbles, including one offer they rejected."

"Across town on Bay Colony Lane in Masterson Station, Eric and Kristy Little put the 'for sale' sign in the yard on the first of October. The price was about $217,000; today it's $205,000. They have had only a few expressions of interest."

"'It's just really frustrating, because I know this is a really good location and the area appreciates so quickly. I just think this is a great deal,' Kristy Little said."

"The selection of new and existing houses is the highest in years and prices are beginning to fall. The economy is strong and employment is strong, so why are home sales so sluggish? 'I think they (buyers) are sitting on the sidelines waiting to see if prices maybe aren't going to go down a little bit,' said Becky Murphy, president of the Lexington-Bluegrass Association of Realtors."

"Meanwhile, more and more housing units, those being offered for sale and for rent, are vacant. Landlords have no tenants, or owner-occupants have moved on to better digs while attempting to sell their older homes."

"The U.S. Census Bureau has surveyed the Lexington and Louisville markets annually since 2003, and estimated the number of vacant units. Lexington's vacancy rate has doubled from 5.1 percent in 2003 to 10.25 percent in 2005, while Louisville's rate increased from 8.6 percent in 2003 to 9.1 percent in 2005."

"'People either continue to hold onto their asking price or withdraw their house from the market' if it doesn't sell immediately, said Brent Ambrose, a Pennsylvania State University economist. Eventually buyers will get 'a phantom price decline. Vacancy rates will go up first, because sellers are reluctant to cut prices. Eventually prices will start coming down to clear the vacancies.'"

"Too many vacancies also can mean that builders misjudged demand and built too many units, Ambrose said. 'As more supply comes on line and fewer buyers are out there, those houses are vacant.'"

"Melissa Brown, president of the Boone Creek Neighborhood Association, said she and her husband drove through new subdivisions along Hays Boulevard last fall. They counted 175 houses that were vacant or for sale, more than 300 building lots and 'a couple hundred acres slated for development.'"

"'Some of the houses, I know, have been sitting there three years because I know the builder,' Brown said. 'With the market so stagnant, it's obvious this area has been overbuilt in the last 10 years.'"