The Des Moines Register reports from Iowa. "The slowdown in home building is dramatic, dropping 26 percent in the Des Moines metro area from January to May compared with a year ago, building permits from the U.S. Census show. Construction activity fell 23.5 percent in the Des Moines area from 2005 to 2006. Real estate leaders say the bulging inventory puts buyers in the driver's seat."

"Iowa Realty agent Kris Mehmen also is having tough conversations with sellers. 'They may say: 'You tell me my house should be priced at $200,000, but let's try it at $219,000 or try $224,000 or $300,000.' It comes down to the agent having enough gumption to tell them it won't sell.'"

"Real estate leaders say 2007 represents a return to a more traditional sales market after setting a record in 2005. 'It was the crest of the wave,' said R. Michael Knapp, chief executive of Iowa Realty. '2005 was the best year I've seen in my 35 years.'"

The Clarion from Indiana. "Seven months into the year, Gibson County sheriff sales on foreclosed properties are moving at a pace to set a new record. Last week, the Gibson County Sheriff's Dept. advertised its 99th sheriff sale this year, compared to 120 at year's end in 2006, which topped a previous all-time-high 105 sales."

"Chief Deputy Sheriff George Ballard said sheriff sales are the result of a court ordered bank foreclosure for the non-payment of standard monthly mortgages."

"'People borrow equity on their house because of credit card debt, then can't afford two mortgages and the credit-card bills,' said Indianapolis lawyer Andrew Klopchin."

"Interest rates a few years ago were at their lowest point in 40 years and have since risen, increasing the monthly payments on adjustable-rate mortgages. 'That's why we're seeing all the foreclosures that we're seeing now,' said bankruptcy attorney Gary Hostetler."

The Star Press from Indiana. "Muncie bankruptcy attorneys say they have seen an increase in filings that echoes a 70-percent jump statewide so far this year."

"And although some of that increase is in comparison to an artificially low total in 2006 that was caused by tougher bankruptcy requirements, one local attorney said the increase in home foreclosures also shares the blame."

"'The new problem is just that foreclosures are so bad,' said Muncie bankruptcy attorney Gordon Doyle, who has practiced for 32 years. 'The way you stop a foreclosure is a Chapter 13 bankruptcy.'"

"The Associated Press reported Friday that that bankruptcy filings in two U.S. bankruptcy courts in Indiana had increased nearly 70 percent over 2006. More than 13,000 bankruptcy filings were recorded through June, a big increase over 7,700-plus filed last year."

The Indystar from Indiana. "The dramatic and widespread jump in Marion County property taxes threatens to depress housing prices or at least freeze the steady rise in home values that property owners have come to bank on."

"'I see values coming down to adjust to buyers' ability to afford the home and the taxes that come with it,' said Kevin Kirkpatrick, president of the Metropolitan Indianapolis Board of Realtors."

"Real estate professionals say some sales are falling through as the impact of higher taxes pushes some properties out of reach for buyers. Others say the increases could result in even more foreclosures."

"Tom Ellis and his wife had planned to sell their two-story College Park home and move into a newer one-story home in the area. But now the Pike Township couple are holding off on putting their home up for sale and seriously considering moving out of state."

"'We had been counting on getting a certain amount out of our house, but there's too much stigma about the taxes to sell it now,' Ellis said."

"Just how severe a blow it will deal to the city's already struggling residential real estate market is unclear. Realtors report some closings of home sales have been abruptly called off, while offers are being renegotiated to reflect the unexpectedly higher tax bills."

"And some homeowners, particularly retirees on fixed incomes, may find they can't afford to stay in their homes. 'If you think the foreclosure rate is bad now, just wait,' said David Matters, mortgage consultant in Indianapolis for Nationwide Mortgage Funding."

"Indianapolis ranked third among U.S. cities in overall home foreclosures last year."

"'Some people have got to come up with $6,000 (extra) by the end of July' to pay their new taxes and avoid foreclosure, said Pegg Kennedy, a Realtor in Indianapolis. 'My voice mail is almost full from people saying, 'Help me, help me.'"

"First Mortgage of Indiana called off one of its closings in the past week when the buyer no longer qualified for the loan covering the mortgage, taxes and insurance on the home. Once the new taxes were figured in, the sale 'blew up,' said Michael Strawn, a VP at First Mortgage."

The Journal Sentinel from Wisconsin. "One big 'if' hangs over metro Milwaukee's new-home market, pushing June's production numbers to an eight-year low."

"'People are ready, willing and able to buy, with one contingency - the sale of their existing home. So everything waits until that sale,' said Matt Moroney, executive director of Metropolitan Builders Association."

"'What we've got now is more perception than recession. Buying isn't gone - it's just deferred. A lot of people, constantly bombarded by bad news like markets crashing in Florida, Arizona and California, are just scared to make a move,' said Waukesha builder Bob Flanagan."

"'Builders say there are a lot of people out there who are very interested in buying,' Moroney said, 'but they're also very cautious. And even though it's a good time to buy, interest rates are still near historic lows and builders are offering incentives, there's nothing forcing people to act.'"

The Wisconsin State Journal. "Like the single-family housing market, the Dane County condominium market suffers from excessive inventory."

"A total of 2,470 condos were on the market during the first quarter of 2007, more than double the number two years earlier, and 252 were sold, according to the South Central Wisconsin MLS."

"The high inventory is the result of slower sales and a boom in condominium construction. The number of Madison condominium parcels in new and converted buildings rose 12 percent last year to 14,012, according to the city assessor's office."

"About $194 million worth of condo projects were completed last year in the city, more than six times the $32 million in projects completed in 1997."

"Developers who once planned on a two- to three-year investment turn-around for a condo project now expect six to eight years, said Brandon Buell, whose family is building the new Hometown Grove condos in Verona in partnership with Elliott Construction of Middleton."

"'These developers have got their necks on the line,' he said. 'They're paying a lot of money to do this.'"

"The slow market has prompted developers such as Joe Krupp, who built Kennedy Point condominiums on Winnebago Street, to offer more buyer incentives, such as leases with an option to buy in, which some rent is credited toward a down payment. Kennedy Point had 10 of 42 units sold by mid-June."

"'We have no shortage of traffic and interested buyers going through our projects,' Krupp said. 'For some reason, they're just not pulling the trigger.'"

"John Sveum of Yahara Builders is...worried about Prairie Park, the partnership's second condominium project in Fitchburg's Swan Creek neighborhood where nearly half of the project's 32 units have sold in 10 months."

"'It truly is painful to do all right on one project and suffer on the next project,' he said. 'It's kind of a helpless feeling on our end because it's not anything we're doing wrong.'"

"The slow condominium market doesn't mean developers are desperate enough to accept extreme low-ball offers. 'We're not talking a fire-sale situation here,' Krupp said."

"(Developer) Pete Frautschi said he gets angry when someone offers $500,000, for example, on a $750,000 unit. But Frautschi said his sales staff calms him down so he can make a more reasonable counteroffer."