The Des Moines Register reports from Iowa. "Homebuilding activity in Iowa dropped 15 percent last year, new U.S. Census data show, with most major cities having declines that ranged from 10 percent in Cedar Falls/Waterloo to 26 percent in Iowa City."

"Last year, builders used incentives, offering perks that ranged from upgraded appliances, closing costs and paid association fees to a leased Mercedes, to reduce the number of new homes in the market."

"The 'gloom and doom' of other larger, more volatile markets has made buyers much more cautious, said Colin King, president of the Des Moines builder association's board."

"'A year or two ago, a couple would start building their house, then put their old house on the market,' said King. 'Now, couples are waiting until they sell their existing homes before starting construction. They're willing to move twice, just to make sure their house sells and they don't have two house payments.'"

"He expects 'overwhelming' inventories in the middle market to shrink with continued job growth and low interest."

"Tom Stevens, owner of TS Construction in Johnston, said he and others expect inexperienced builders to exit the slower market. Stevens said the rush to capitalize on the boom in 2005 contributed to the number of homes in the market."

The Detroit News from Michigan. "The best that can be said about the Metro Detroit housing market is that some of the worst may be over. And the worst that can be said is that the rest of the worst is yet to come."

"The only number that went up wasn't a good one. That's the number of homes listed for sale, and it soared across southeast Michigan by a staggering 41.2 percent."

"'I never saw values go down like this,' says Steve Cole, a 32-year real estate veteran in Birmingham. 'This year will be the bottom. We'll probably see an increase in sales numbers, but I don't think we'll see an increase in home values.'"

"Another issue that could continue to hit the market is the rising number of foreclosures. One of every 21 Wayne households entered foreclosure last year, the equivalent of 40,219 households."

"At the moment, foreclosures aren't tapering off, says Doug Schrandt of Life Properties in Chesterfield. His firm works with Macomb County owners who are in danger of losing their homes to foreclosure. 'We have a steady 60 to 70 homes a week,' Schrandt says. 'Some areas are really suffering, like Eastpointe and the areas closer to Detroit.'"

"The foreclosure market could improve as auto-related job losses slow down. Or it could increase as more adjustable-rate mortgages continue to reset, hitting struggling homeowners with rising monthly payments that may push their house payments beyond reach. 'We've got lending institutions to blame as well as the auto companies,' notes Karen Thomas, an associate broker in Commerce Township."

"Higher-end homes will continue to stay off the market unless homeowners are desperate. Cole just handled the sale of a Birmingham home for more than $600,000 where the owner still had to bring nearly $80,000 to the closing to cover the shortfall in what he owed to the bank."

"'If buyers don't buy now,' says Cole, 'they've got to be crazy.'"

The Business Review from Michigan. "Housing starts are down and builders are glum, but 2007 promises better times, one economist says. 'The demand side is good -- it's the supply side we're working on,' National Association of Home Builders forecasting director Bernard Markstein III told builders and associates."

"But the economy and house inventories weigh heavily on local builders' minds, he reported, judging from responses to this year's HBA survey. Members indicated that the area is indeed overbuilt, that sales and profits didn't live up to expectations for 2006 and that the 2007 outlook is weak across all house price ranges."

"'2006 was a year to forget, and it was a year we did not expect,' Erickcek said."

The Ann Arbor news from Michigan. "Some Pfizer employees are already meeting with Realtors about listing their homes, fearing a glut of houses in an already slow real estate market will drive prices down or make it difficult to sell their properties."

"'We do have a number of Pfizer clients who own two properties - they bought a home last year and haven't sold their (other) home yet,' said (realtor) Martin Bouma in Ann Arbor."

"Bouma said the day the news broke, he had several non-Pfizer clients calling in a panic, wanting to lower their homes' prices to sell it quickly before a perceived glut of Pfizer homes hit the market. 'I said, 'Take a deep breath and let's keep this in perspective.'"

The Daily Herald from Illinois. "Officials of the Federal Reserve Bank of Chicago called on state agencies to clamp down on lenders that make high-risk mortgage loans to people who can’t afford them."

"In a conference at the bank on Wednesday, Federal Reserve examiner John Taylor said states need to put more resources into examining the lending and marketing practices of mortgage brokers before a rash of delinquencies and foreclosures do severe damage to housing markets. Mortgage brokers are regulated by states, not federal agencies."

"'I’m very concerned that there’s a ticking time bomb in (loan) portfolios,' Taylor said."

"Christen Wiggins of Neighborhood Housing Services of Chicago Inc. said part of the problem is the fact that the pitch of lenders is pretty simple: lower your monthly payment. The warning material provided by organizations like the Fed is often hard to understand, containing terms like 'negative amortization,' Wiggins said."

"John Bellini at Farmington Hills, Mich.-based Paramount Bancorp Inc., said his bank does not lend to the highest-risk borrowers, but does offer non-traditional mortgages. He said they have to in order to stay competitive."

"Michael Mangin, executive VP of retail lending at Marquette National Corp., said non-traditional mortgages were originally created for investors who would purchase property using low initial payment rates, renovate, and flip the property before the loan reset to higher payments."

"But now those loans are marketed to everyone, even people with bad or no credit. He said that tighter regulation would push out the bad seeds."

"I think it’s fair to say this isn’t an issue that’s going away any time soon,' said the Federal Reserve’s Taylor."