The News Post reports from Maryland. "The average price of a home sold in Frederick County in the first quarter of 2007 fell by $5,800 and spent more time on the market. In April, 196 homes were sold in Frederick County, dropping nearly 27 percent from 268 in April 2006, according to the Greater Capital Area Association of Realtors."

"Inventory is too large, said Realtor Stephen Mackintosh. A healthy housing stock is about 1,000 homes. The county has 2,000 on the market, Mackintosh said."

"Mackintosh said the silver lining in the market could be for buyers wanting to move up to a larger home. 'There's a lot going on where they can get a good deal,' he said."

The Times Dispatch from Virginia. "What a difference from a few years ago when builders in the Richmond area couldn't build fast enough and received multiple offers on houses in the planning stages. 'Everyone got used to the craziness,' said Rich Napier, president of the Home Builders Association of Virginia. 'We're back to a more normal pace,' he said."

"Local builders are sweetening the deals to unload existing inventory in a soft market for new homes. They aren't cutting costs, as they would if the market tanked, but they are offering incentives to entice more buyers. Centex Homes, with houses for sale in 16 subdivisions here, is offering $30,000 in upgrades. Main Street Homes, one of the largest Richmond builders, will build a basement at half price."

"It's a buyer's market, particularly in the $400,000 to $650,000 range in the Richmond area, Napier said. 'There's a lot to choose from for that, not only in new homes but existing homes.'"

"Napier built the Richmond Symphony Designer House last year. The 7,600- square-foot French country home in Founders Bridge, Chesterfield County, is still on the market for $1.95 million. The house has $125,000 worth of electronics, and $200,000 worth of discounts is built into the price, Napier said."

"'I'm not happy that it's sitting there, but there are not that many $2 million buyers walking around out there,' he said. Still, 'for those who think the sky is falling, it's just not happening,' Napier said."

"Economist Christine Chmura said the housing industry may have hit bottom. The number of building-permit applications statewide flattened over the last three months, and that could signal a turn, she said."

"'It's unusual for the general economy to be strong overall but the housing market to be in a recession,' Chmura said. 'The main problem is affordability. Prices are rising faster than income, and that makes it difficult to purchase a home.'"

"Richmond saw double-digit appreciation during 2005, but it never rose more than 20 percent as it did in the Northern Virginia area, which was hit harder by the softer market. 'We expect the Richmond area to turn up sooner, because the housing industry here is in better shape than the nation,' Chmura said."

The Daily Progress from Virginia. "In an increasingly common scenario in Central Virginia, on Tuesday attorney John G. LaFratta stood on the steps of the Albemarle County Courthouse to auction off a foreclosed property."

"The number of foreclosures in the Charlottesville region has jumped dramatically, reflecting a trend seen both across Virginia and nationally. 'The problem is absolutely as bad as people are saying it is and it’s going to get worse,' said Michael Martin, loan officer and CEO of Crown Mortgage Services in Charlottesville. 'There’s some chickens coming home to roost.'"

"During the first three months of 2007, there were 128 notices of foreclosure filed with The Daily Progress, a 27 percent increase over the same period in 2006. The number of area families who have fallen behind on mortgage payments appears to be even higher."

"The Piedmont Housing Alliance, which seeks to help homeowners keep their homes after they have defaulted on mortgage loans, has seen its number of clients skyrocket from one or two people per week in early 2006 to two or three per day so far in 2007."

"'It’s really scary,' said Shelley Murphy, director of program services for the Regional Homeownership Center at PHA. 'We’re having so many more clients come in that we’re almost not able to handle them all.'"

"Supervisors like Murphy are taking on cases at the homeownership center. 'We’ve never seen so many cases,' Murphy said. 'And they’re from all levels of income. It’s not just low-income folks - it’s everybody.'"

"The number of foreclosures statewide jumped by 137 percent during the first three months of 2007, compared with the first quarter of 2006, according to RealtyTrac. A Richmond nonprofit agency estimates that 10,000 families in Virginia will have lost their homes by the end of the year."

"As the subprime lending industry exploded, lending companies began to relax their standards for who could borrow. 'There’s a lot of people out there who are in homes that really should never have been given a loan,' Martin said. 'There’s a whole vulture system out there that preys on these people.'"

"Some homebuyers saw adjustable rate mortgages as the only path to homeownership in the Charlottesville-area housing market, where the median housing cost was $289,900 in 2006."

"Troy Johnson, of Absolute Appraisals in Charlottesville, assesses the value of properties on behalf of lenders and mortgage brokers after a homeowner goes into default on a loan. In recent months, Johnson said, his firm’s business has increased substantially."

"'Last year we were getting hired on these jobs once every two months or so. Now it’s about one every week,' he said."

"Johnson said he has also observed that more homeowners who took out home equity lines of credit to pay for renovations, college tuition, new appliances or other big-ticket items in 2004 or 2005 are now finding themselves stuck with homes that are actually worth less than their total loan amount."

"'People are upside down in their own houses, so to speak,' he said."