Time Magazine reports on California. "Up to now, the booming housing markets in Los Angeles, San Diego and Orange counties had barely felt the chill that hit Miami and Denver. But this week's spate of gloomy housing data included ominous reports from the West Coast. Led by an astonishing 799% rise in Los Angeles County, foreclosures in southern California jumped 725% in the second quarter, to a record 9,504, from 1,152 a year ago."

"'We thought the upper end of the market was immune,' says Steve Johnson, of Metrostudy. 'But this is now like Kudzu in the South, spreading into all product types in the southern California housing market.'"

"'People began buying houses they couldn't afford under the theory that the more house you buy, the more wealth you have once it appreciates,' he says. 'It's kind of a Ponzi scheme on a mass scale. But there has to be an end at some point.'"

"Could the Inland Empire's contagion debilitate L.A. and areas beyond? Even John Karevoll of DataQuick admits that the sub-prime crash has plunged the entire real estate sector into uncharted territory. 'Will it create a flood of foreclosures that drags down values in the rest of the market? So far it hasn't but at some point, it might,' he said."

The County Sun. "What's happening in San Bernardino and Riverside counties is more like a tug of war. Sellers won't budge from prices they think their homes are worth and buyers sit tight in hopes prices will drop, according to economists and real-estate professionals."

"'They don't get the market,' Redlands-based regional economist John Husing said about buyers. 'They don't understand it. They think prices are too high.'"

"Only half as many homes are selling in the San Bernardino/Riverside area compared with June 2006, and their prices have decreased 3.4 percent. The median price of a home in San Bernardino and Riverside counties at the end of June was $390,230, CAR reported."

"Pete Gliniak, a Covina-based real-estate professional who specializes in short sales all over the Inland Empire, calls it 'oversaturation' and thinks too many people bought expensive homes in the two-county area that they couldn't afford and "had no business buying them,' he said."

"'People got caught up in the frenzy of 2005 and it spilled into 2006,' he said of new home builders and buyers."

"Steve Thomas, co-owner of Rancho Cucamonga-based CIG Property Management and Investment, hopes to capitalize on the housing market's downturn by buying foreclosed properties in places like Fontana, Rialto and Highland."

"'I'm able to find properties easily at $50,000 below market, and sometimes $100,000,' he said."

The Desert Dispatch. "Mortgage default notices in San Bernardino County surged 180 percent in the second quarter compared to the same time last year, while the number of homes lost to foreclosure rocketed 987 percent over the same period, a real estate information service reported."

"San Bernardino County registered 5,141 notices of mortgage default in the second quarter, up from 1,839 a year earlier. Homes lost to foreclosure in the county totaled 1,489 in the second quarter, compared to 137 over the same period last year."

"The trend toward rising foreclosures will continue to accelerate in the area, said Carolyn McNamara, a broker in Phelan specializing in foreclosures and repossessions. 'My office alone has received 18 foreclosures in the last two weeks, and I am just one of many agents that specializes in repossessions and foreclosures in the High Desert,' she said."

The Daily News. "High prices and tight credit are restricting demand in the housing industry in the Inland Empire, according to a new study by Metrostudy."

"'The second quarter was an awakening for the housing industry,' said Steve Johnson, Metrostudy's Southern California director. 'It is clear now that there is not going to be a quick turnaround, and builders should plan accordingly.'"

"The study said that in order to sell product, home builders would be forced to price some homes at or below cost for the remainder of the year."

The Press Enterprise. "Lenders sent default notices to Inland homeowners at nearly triple the rate of a year ago, as owners continue to fall behind on payments amid a slump in the real estate market. The number of homes that ended in foreclosure saw an even sharper increase, hitting their highest levels in a decade."

"According to Inland data from Irvine research firm RealtyTrac, the highest total foreclosure filings by ZIP code in the second quarter -- including default notices, trustee sale notices and bank repossessions -- were seen in Fontana 92336 (461), Murrieta 92563 (441), Hesperia 92345 (416), Rialto 92376 (368) and Victorville 92392 (359)."

"DataQuick said the worst-hit neighborhoods in the Inland area and Central Valley might already be seeing property values eroded somewhat by foreclosures."

The Orange County Register. "Building permits for single-family homes fell to their lowest level this year in at least two decades, Orange County construction data released Tuesday show."

"A total of 3,627 residential permits were issued from January through June this year, the smallest number in 14 years, the research board reported. For June alone, residential permits fell to their lowest level for any month so far this year."

"Betting on a second-half recovery for (Orange County) housing? July started out with the same old story. Fresh DataQuick figures show sales running 26% below last year for the 22 business days ended July 12."

From Forbes. "Another homebuilder, another big loss. Like other builders that posted earnings this week, Standard Pacific racked up hefty charges as it reduced the value of its real estate holdings on its balance sheet."

"Standard Pacific said Friday morning that it swung to a second-quarter loss of $165.9 million. The company suffered a $306.0 million charge to revalue its land and home holdings, reflecting the deterioration this year in U.S. housing prices."

"'This environment has resulted in significant price competition leading to margin erosion and further impairments of the company's inventory holdings,' said Standard Pacific CEO Stephen Scarborough."

"Standard Pacific is headquartered in Irvine, California. Its business is heavily concentrated in the state, with 42.2% of its homebuilding revenue coming from there in the most recent quarter."

The Tracy Press. "Foreclosure rates around Tracy are soaring, and abandonded houses are plaguing many neighborhoods. The house at 2901 Lincoln Blvd., is in foreclosure and abandoned. The front yard has chest-high weeds in place of a lawn, the side gate and garage door are wide open, and cigarette butts are strewn across the driveway. It appears to be a sitting duck for vandals and squatters."

"The Lincoln Avenue property is hardly the only one in such shape. More than 10 percent of homes on the market in Tracy are being taken over by banks in foreclosure proceedings, local real estate agent Brian Barringer said."

"Real estate professionals are quick to point to the root of the problem; bad loans."

"Tracy, like the rest of California, is witnessing a generation of homebuyers paying a steep personal price for risky sub-prime loans that gave them buying power just two or three years ago, said Tracy broker Dave Konesky, a director for the Central Valley Association of Realtors."

"During his 20 years in the industry, Konesky said he’s never seen such a high number of foreclosures in Tracy or elsewhere. The last time the market took a turn like this was 20 years ago, when people first had the option of buying homes with zero money down."

"'Like then, people can’t make their mortgages, and the value of the home has gone down considerably,' he said. 'When the housing market was really high, we were giving these sub-prime loans out. And after two years of interest-only payments, the payments balloon into unmanageable amounts.'"

"Barringer began his career at the market’s height three years ago. Back then, property owners sold, refinanced or caught up with their payments if they were financially over their heads."

"Not now. 'There’s a lot of people walking away from their houses right now because they have no equity,' Barringer said."