A report from the Washington Post. "Residential property values are dropping lower than county and city officials had projected, foreshadowing an even tougher budget season next year. There are 20 percent more houses for sale now than at this time last year, said said John P. Grzejka, Manassas's commissioner of revenue, and the number of foreclosures continues to rise. The foreclosure rate and the flooded market are blamed for the falling property tax base."

"'The big question is whether we've seen the bottom or if we see a continuing drop in values because of more houses on the market. The pressure is to continue to lower their prices,' he said."

"The Prince William Board of County Supervisors budgeted for a 2 percent overall drop in assessed real estate values, but the county is seeing a nearly 4.5 percent drop when comparing prices from May 2006 to those in May 2007, said Allen Scarbrough, the county's investment portfolio manager."

"Nearly 700 homes in Prince William County entered the foreclosure process in the first quarter of 2007, according to RealtyTrac. RealtyTrac data show that during the first three months of this year, 68 Manassas properties either were the subject of a default notice, were posted for sale or were repossessed by a bank."

"That compares with the first quarter of 2006, when there were 12 in Manassas; itself a significant increase from the first quarter of 2005, when there (was) just one in Manassas."

"'It just seems like the foreclosures are really hitting the construction workers' areas and some of the lower-end demographic,' said Supervisor W.S. Covington III, who said local real estate agents had told him that some county neighborhoods are seeing closer to a 9 percent drop in values."

"Prince William and Manassas had some of the highest rates of subprime lending in the Washington region, according to a March study by NeighborhoodInfo DC, a project of the Urban Institute and the District's Local Initiatives Support Corp. Nearly 18.5 percent of the county's new-home purchases or refinanced mortgages in 2005 were through subprime lenders, according to the study."

"In Manassas, 23 percent of 2005 mortgages were made by subprime lenders."

"These types of mortgages are very favorable to people who have 'informal income,' such as illegal immigrants and people who are self-employed, said Peter Tatian, a housing expert at NeighborhoodInfo DC. Buyers who thought they were going to 'flip' a house for a higher price also were candidates for these mortgages, he said."

"'Even if those homes don't go to foreclosure, people end up having to sell at unfavorable terms for them. Whatever they put into that home, they are likely to lose,' he said."

From WSLS in Virginia. "In May of 2006, 575 homes were sold totaling more than $199 million in sales. In may of this year, only 443 homes sold totaling a little more $97 million. That's a 23% drop in sales."

"Kit Hale, a local realtor and the 2006 president of the Virginia Association of Realtors, says we are in a slow down with more homes on the market."

"'Homes were not staying on the market long the last several years, so now, yes, the inventory is up,' Hale said. But, he adds that the housing market is essentially correcting itself."

The Times Community. "The real estate business...seems to be facing the most difficulties right now, after several boom years. National surveys show that residential real estate has been hardest hit, even in this area, which some have called 'recession-proof.'"

"For Valerie Frank, president of Preservation Mortgage in Warrenton, 2005 was great, and 2006 was steady, but 2007 is very slow."

"'I think it's going to get worse before it gets better,' she said. 'This is a first-time homeowners market, an investor's market, and definitely not a refinance market. Property values just are not there anymore.'"

"'I'm seeing a lot of foreclosures in Haymarket, and they are beginning to happen here in Fauquier County left and right. People who are in this business are suffering,' Frank said."

"Steve Vento, executive VP for Angler Development, has seen the residential side of the business dry up."

"'Last year was a challenge, and 2007 is proving to be challenging for us, as well,' he said. 'Last year was substantially worse than 2005 for us. Residential lots that we prepare are not moving at all. We're hoping that this is the bottom.'"

"'The economy is an anomaly to me,' he continued. 'We still have good job growth, mortgage interest rates are still low, but residential is not moving. I think what has happened is the investors who used to buy houses to flip them later for more money have all left the market, and that's caused the market to slow down.'"