The Dallas News reports from Texas. "Homebuilders hit the brakes in the first quarter, cutting Dallas-Fort Worth starts almost 35 percent. Local housing production totaled less than 8,000 single-family units, the lowest quarterly total since 2001, according to a report released Monday by Metrostudy Inc."

"And sales of both new and pre-owned homes fell in the quarter. Pre-owned home sales dropped 5 percent, while purchases of new houses were down 7 percent from a year ago."

"Inventories of homes for sale have been rising, forcing builders to cut prices and curtail starts. Because of the cutback in building, the number of homes in the production pipeline, both under construction and completed, fell to 26,466 units, according to Metrostudy."

"That's down from a recent high of 30,117 homes at midyear 2006. Builders sold 9,917 homes in the first three months of 2007."

"'We've seen demand for new homes slow down a bit,' Metrostudies David Brown said. 'We've seen less investor activity, and with the subprime loan market tightening up, we've had some purchase cancellations.'"

"There were 11 percent more pre-owned homes on the market in March than a year earlier, with more than 47,000 houses listed for sale in North Texas. That works out to about a 7 ½ -month supply."

"Dallas appraiser Chuck Dannis said that the pullback in builder starts was a couple of quarters late and that home inventories are high. Near-record foreclosures have added to a glut of homes in some areas. 'The market needs the rest of 2007 to digest the foreclosures caused by loans that probably should not have been made in the first place,' Mr. Dannis said."

"The owners of an Oak Lawn high-rise condominium have decided to auction off more than a dozen of the luxury residential units."

"The rental units were converted into condominiums and have sold for more than $500,000 to almost $3 million. Five of the units will be sold without a minimum bid. The auctioneer is suggesting that opening bids for the high- rise properties start between $250,000 and $500,000 for the condominiums, which range from 1,362 square feet to 5,164 square feet."

"'We want to sell the building out,' said Steve Levin, president of Centennial Real Estate."

"Dallas housing analyst Mike Puls said the planned auction is a sign that the high-rise condo market has softened. 'The air is coming out the bubble,' Mr. Puls said."

"Foreclosure signs are popping up in front of thousands of Dallas-Fort Worth homes for sale this spring."

"'I'm finding more of them when I look at the listings in a neighborhood for comparable prices,' said Carrollton real estate agent Wendy Hulkowich. 'The foreclosure market is definitely affecting our listing price comps.'"

"It's no wonder that home foreclosures in North Texas are starting to weigh on the entire housing market. Dallas-Fort Worth has one of the highest home foreclosure volumes of any area of the country. Last year, lenders foreclosed on more than 18,000 homes in the D-FW area, according to research by Foreclosure Listing Service Inc."

"During the same period, about 38,000 single-family homes were listed for sale in the MLS. Currently, about 6 percent of the MLS listings in North Texas are identified as former foreclosures. But those numbers don't include nearly all of the repossessed properties, agents say."

"'I think the price impact will start showing up this year,' said James Gaines, an economist with Texas A&M University. 'In subdivisions where foreclosures may run as high as 20 percent or more, we can anticipate not just a slowdown in price increases, but price declines and perhaps significant, greater than 5 percent, price declines.'"

"'They are cutting prices, but so far not a lot,' said Connie Zetterlund, a Dallas residential agent who specializes in sales of foreclosed homes. 'But because of what is in the pipeline, I think we will be seeing some price cuts. When a neighborhood has so many foreclosures, they have to do something to sell the properties.'"

"'They are hanging onto the properties longer,'" said Ms. Hulkowich. 'They are overpriced.'"

"She estimates that the foreclosed homes she sees on the market have been discounted from 11 percent to 14 percent to start. But many of the houses need expensive repairs, Ms. Hulkowich said."

The American Stateman from Texas. "The softening housing market around the country may be taking a toll on Central Texas. The number of home starts in the first quarter of 2007 dropped 28 percent compared with the same period a year ago."

"Builders have become wary of starting homes in part because it's more difficult for some buyers to qualify for mortgages, said Mark Sprague, (with) Residential Strategies' Austin office. The tighter credit requirements are related to the shakeout in the so-called subprime market, he said."

"And that shakeout has trickled into Austin, with more stringent lending rules, he said, especially among subprime lenders."

"'These challenges are primarily impacting builders in the first-time market, homes generally priced below $200,000,' said Eldon Rude, director of the Austin office of real estate research firm Metrostudy."

"The latest figures illustrate his point. Home starts in the $111,000-to-$150,000 range plummeted 51 percent in the first quarter, compared to a year ago. And starts for homes priced from $151,000 to $200,000 were down 35 percent."

"With the subprime situation having the greatest impact on first-time buyers, many builders are putting lots back on the market, mainly in lower-priced subdivisions, said Dick Rathgeber, an Austin developer with residential projects in all price ranges."

"But Rathgeber said national builders are 'overreacting in Austin.'"