A report from the Washington Post. "For almost anyone selling a condo, 2006 was a bleak year. The first two months of 2007 have been promising, though, real estate agents across the region say. But does that mean that the worst is over for the condo market? Probably not, analysts say."

"Gregory Leisch, CEO of the Alexandria firm Delta Associates, said the slowdown in sales activity will probably continue through the second half of 2007. There are 21,523 units under construction or being marketed, according to Delta. There are another 20,469 units planned over the next three years."

"At the same time, sales volume has dropped as investors have fled the market. After selling more than 3,000 new condos each quarter of 2005, developers in the Washington area sold 1,629 units in the first quarter of this year. At that sales velocity, it would take about three years to get rid of that inventory, Delta's report said."

"'We're kind of at the bottom of things shaking themselves out,' said Lisa Fowler, a researcher at George Mason University."

"Fowler said condos took a heavy hit because so many investors bought them, then tried to unload them once the market weakened. At the same time, many developers were too far into the building process to terminate their projects. 'You go up faster and you have farther to fall,' Fowler said."

"Many asking prices last year still reflected the double-digit appreciation of the early part of the decade. Now, sellers have to be more realistic, agents said."

"'They're still saying my neighbor sold his for $500,000 two years ago and why can't I sell it for that now,' said Nelson Mendes, a loan officer in Arlington. 'You have to educate them. You can ask for any price you want but are you going to attract buyers? Probably not.'"

"Since the real estate market softened, builders have been stuck with too many houses and too much land, in part because jittery buyers canceled contracts at a frantic pace last year. The cancellations kept coming at the beginning of this year."

"In the Washington region, the cancellation rate for new homes hit 11.4 percent in January, up from an already high 9.3 percent at the same time last year, according to Hanley Wood."

"The number of contract closings dropped 33.3 percent that month to 947, from 1,419 in January 2006."

"'There's a growing willingness to trim prices and offer other kinds of incentives' to lure more people to buy, said David Seiders, chief economist at the National Association of Home Builders. 'That's been a theme, and there's no doubt it's continuing.'"

"Builders are also watching the problems plaguing the mortgage industry, namely the subprime market."

"Builders are doing more than just cutting prices or offering incentives, said Todd Vencil, a home building industry analyst at BB&T Capital Markets. They're also ridding themselves of land. They've done this mostly by dropping options that gave them the right to buy land in the future in exchange for a small down payment, Vencil said."

The Baltimore Sun. "Charles McCloud had never owned a home, but as he entered his late 50s he thought it was time to have the security and stability that would come from having a place of his own."

"So two years ago, he bought a detached two-story house on a quiet corner in the Howard Park section of West Baltimore for $225,000, borrowing the money for the closing costs and taking out two loans, one of which had an interest rate of more than 10 percent."

"When his original four boarders shrank to two, McCloud found himself in trouble."

"McCloud is one of thousands of Marylanders with subprime loans who are facing, fearing or fending off foreclosure. A recent report by the Mortgage Bankers Association said that at the end of last year, one out of eight of the nearly 130,000 subprime loans in the state were delinquent."

"'I can't remain here,' says McCloud. 'I need to make plans to go somewhere else.'"

"'A lot of people are into a deal they shouldn't be in,' says Frank Fischer, a longtime counselor who is working with McCloud. 'The slightest thing makes them fall off the margin.'"

"Plaintiff Tanya Jones and her sister Donna Jones took out a $520,000 loan from IndyMac in the fall of 2005 on a home in Brandywine in southern Prince George's County. The loan had an initial interest rate of 1 percent and an initial monthy payment of $1,673 - but an adjustable rate provision allowed the rate to rise almost immediately, with a limit of just under 10 percent."

"Tanya Jones says she didn't realize at first that her monthly payments would more than double within a couple of years. 'I make $4,000 a month before taxes,' says Jones. 'I can't afford $4,000 a month [in mortgage payments] and still survive.'"

"Tanya Jones says she and her sister are about $20,000 behind in their payments. 'If I lose this house, I don't know what I'll do,' she said. 'I'm trying every way I can not to lose it.'"

"Another Northeast Baltimore woman, Dawn Tucker, is also looking to sell her house - not because of her original mortgage but because of her decision to refinance."

"Tucker bought a detached, two-story house in Gardenville six years ago for $89,000. Hoping to pay off some debts, she refinanced in 2005, not fully grasping that loan fees would shrink the amount of money she would receive while the higher interest rate and greater principal would raise her monthly payments by more than $300."

"'I thought it would be a little higher and I would only have one bill,' she says. 'I just dug myself in a hole.'"

"As of last week, she had not made her March mortgage payment. Tucker figures she needs to get about $150,000 for her house to break even. Houses in the neighborhood have recently sold for well above that, she says, but she's cautious about her prospects. 'I really want to sell,' she says."

"'Because it's a buyer's market, who knows what I'm going to get?' she says. 'I'll probably take what I can get so I don't have to face foreclosure.'"

The News Leader from Virginia. "Because of an abundance of homes that were built but have yet to sell in Augusta County, there are lots of great deals in the housing market. But those deals may be short lived, local Realtors and planning professionals say."

"After 27 years in the market, Staunton native Wilson Fauber has seen his share of ups and downs. Last year, however, wasn't what Fauber would consider a year of growth. When the nation's housing bubble burst, it rocked the local market. After years of big growth, the market turned south — but only temporarily, Fauber believes."

"'What we are experiencing is a market adjustment,' Fauber explained."

"'Back in 2004, new construction was so strong here we were building houses as fast as we could to satisfy the demands of local buyers,' he said. 'But when the market began to soften there were a lot of builders who did not heed the warning. They didn't slow down on their new starts.'"

"As the correction that was taking place in other parts of the country slipped into the Valley last year, those builders took a beating, Fauber said. 'Since they didn't slow down, we ended up with an oversaturation of new homes in the market. Consequently, most of the builders have had to significantly reduce the prices of their new homes.'"

"Fauber's not kidding. New homes in the area have been discounted anywhere from $20,000 to $50,000 he said. 'It was done out of necessity to delete this excess inventory,' Fauber said."

"But now that inventory is almost gone and the demand is still going to be there. Now, you're going to start seeing prices increase."

"'It's going to be one of those things where some people will be kicking themselves in six months for not getting into the market,' said Fred Morgan, immediate past-president of the Greater Augusta Association of Realtors. 'The demand for housing here will not fade,' said Morgan."

"'One of the reasons the prices simply can not drop is because of the cost of land here,' Fauber said. 'Back in the '90s, a $300,000 house came with an acre or two of land. A few years ago, that $300,000-house came on a half-acre lot. Today, that same house is being built on a lot that's 50 feet wide.'"