The Contra Costa Times reports from California. "Contra Costa County home sales in February dropped nearly 20 percent from last year, a 10-year low, while prices also dipped 5 percent, from a median of $568,000 to $537,000, a Dataquick reported. Several East Bay real estate agents and brokers said they think February and even March statistics will be lower than anticipated because of a drop in lenders and limitations on 100 percent financing."

"'Lots of lenders are closing their doors and pulling loans in the middle of escrow,' said Griselda Quezada-Chavez, an agent in Benicia. 'It already has had a little bit of an impact.'"

The San Francisco Chronicle. "In the past two weeks a series of events have cast doubts on the possibility of a quick rebound in the housing market."

"'The problems with the subprime loans have nothing to do with today's sales numbers,' said David Shulman, a senior economist with the UCLA Anderson Forecast. 'The subprime meltdown is two weeks old. In all likelihood, what's going on in the subprime market will make things much worse in terms of both volume and prices.'"

"Prices fell most steeply region-wide for new homes, as builders continued to slash prices to clear inventory. The median price for a new single-family house fell 13 percent from a year earlier to $595,000, according to DataQuick."

The Modesto Bee. "Home sales in the Northern San Joaquin Valley last month tumbled to their lowest levels for February in nearly a decade, and median prices also slid, a real estate research firm reported Thursday."

"In Stanislaus County, the number of homes sold declined by 40.4 percent and median home prices dropped by 9.4 percent last month compared with a year earlier. Sales in San Joaquin County were off by 44 percent and prices by 6.7 percent, while Merced County sales plunged 54 percent and prices 14.2 percent, according to DataQuick."

"'There's at least as much uncertainty as there was a year ago,' said DataQuick analyst Andrew LePage. 'I think we're closer to a normal market now than two years ago, but normal has to be redefined.'"

The LA Times. "In California, Perris is at the epicenter of mortgage problems. From November to January, 177 homes in Perris' central ZIP Code have received notices of default, the first step toward foreclosure."

"The trouble stems partly from a proliferation in recent years of so-called sub-prime loans to borrowers with shaky credit or erratic income. The Inland Empire is full of new and almost-new homes and commuters who often travel great distances to jobs to pay for them."

"The billboards on the way into town extol 11 active developments. Signs on the city streets point visitors to them. But many intersections tell a more downbeat story. Telephone poles are festooned with signs that say, 'Behind in payments? We can help.'"

"Lily Quinlan just sold her three-bedroom house on a cul-de-sac in one of Perris' older developments. It went on the market last June, for $395,000. Her first agent reduced it to $383,000, then $375,000, then $369,900. Her second agent dropped it all the way to $333,000, where it finally found a buyer."

"While the price was descending, Quinlan's ability to pay the mortgage was becoming intermittent. World Savings, their mortgage company, started sending default notices."

"The couple bought in 2002, as the boom was beginning. At its peak, the house was worth more than three times what they paid for it. But they refinanced and took cash out to do upgrades on the house, and then they refinanced again because — well, Quinlan isn't sure why."

"She's learned this about lenders and loan agents: "They make it look like they are trying to do all this for you, but the reality is that it was mainly for them. They got their chunks out of you, and then they put you out to the wolves.'"

"Even when she was in default over the last few months, the offers continued. 'They kept calling and calling, saying, 'You won't have any payments for two months.' And I'm like, 'Dude, the last thing I need is another refinance.'"

"She's sorry to be leaving for Florida. If their house had not increased in value, if it was still worth exactly what they had paid for it four years ago, they could afford to stay. But the boom ruined everything, and so Quinlan was selling what she could at a yard sale before packing for the movers."

"Her neighbors house went on the market this week for $369,900. 'The price you got is going to drag down our price,' Ron Blacic tells Quinlan."

"'Thanks, Lily,' cries Dawn Blacic as she pretends to punch her."

"The Blacics, who are moving to Yucca Valley, owe $372,000. They refinanced once, taking out cash to pay for their wedding and other bills. 'We figured the value would go up and up, and it didn't,' says Ron."

"After the agent's cut, the couple will need to bring a check to the table for $22,000 or so to avoid destroying their credit. 'We want to purchase another home,' explains Ron. 'We don't want to wait 10 years until our record is clean again.'"

"If the house sells for their asking price, the Blacics will come out about even on their first real estate venture: First the house dispensed money, then they had to give it back. For them, it will be as if the boom never happened. On the other hand, if the house doesn't sell immediately, they'll have to rethink their plan. They can borrow only so much."

The Union Tribune. "San Diego's leading economic indicators fell for the 10th month in a row in January. 'The interesting thing is the impact of housing on the economy,' said economist Alan Gin, who compiles the indicators. 'In employment, not only construction and real estate are down, but you're also seeing an effect in the retail sector.'"

"Peter Schiff, who runs Euro Pacific Capital in Newport Beach, said the real estate decline will be an impact on the economy for quite some time."

"'Think about all the mortgage debt that was assumed by San Diegans in the last few years,' he said. 'All they're going to be doing is paying interest on that money. Instead of buying a new car or going shopping, they'll be paying down their interest on interest-only loans. And there are so many people who bought homes for zero down payment, they will just be going to be walking out of their homes, if they haven't already, since they have no financial incentive to stay. This is a real disaster.'"

From Reuters. "Unlike many borrowers who took out subprime loans, Andy Sobel had good credit, a decent job and modest savings, but he needed to stretch to buy a home in the white-hot San Diego housing market in 2004."

"Three years later, Sobel has lost his home and his savings, and he faces a big tax bill as a consequence of a failed subprime mortgage held by Countrywide Financial Corp. he says he should never have been written."

"He knew payments on the loan could rise, but was told he could refinance. His broker advised him to take out a negative amortization loan that would add $300 each month to his principal and 'ride it out for a few years' until the market recovered."

"'I said, 'Are you crazy?' I started really worrying,' he said."

"For Sobel, the banks began foreclosure proceedings in December. Both lenders have agreed to allow Sobel to sell the condo at a loss of $60,000, on which he has to pay taxes."

"'You never think that this could happen to you. You feel like an idiot,' said Sobel, who has a doctorate in education. 'You fall down and they stab you.'"