The Pioneer Press reports from Minnesota. "New numbers out Tuesday confirm suspicions: The Twin Cities housing slump has slid into, well, a bust. City officials issued just 592 building permits in June, a number nearly 50 percent off the recent monthly permit peak of 1,104 in June 2005, according to the Builders Association of the Twin Cities. But steep declines of 30 percent or more off peak activity have 'housing recession' written all over them, economists say."

"Some housing experts eschew the term bust altogether. It's just too alarmist and unfairly connotes wholesale collapse, said George Karvel, a real estate professor at the University of St. Thomas College of Business. Karvel prefers the term 'dramatic adjustment,' a process he anticipates could take four years to work itself out."

The Star Tribune from Minnesota. "The Twin Cities housing market is in a clear recession. During the first six months of the year, the number of closed sales was down 16 percent while inventory continued to increase. The median sale price of single-family houses, condominiums and townhouses fell 2.17 percent, according to data released by several Realtor groups."

"Not since the dot-com bust has so much attention been focused on a single sector of the economy, as home sales, prices and consumer confidence have headed downward so soon after one of the most prolonged real estate booms in history. Buyers, sellers and brokers have been left with whiplash."

"'It's nerve-racking,' said Deneen Price, whose south Minneapolis house has been on the market since April. She recently knocked $5,000 off the price of her three-bedroom house in the Longfellow neighborhood in hopes of drumming up activity, but she's had no luck."

"'I thought it would be on the market for just a hot minute,' she said."

From Minnesota Public Radio. "'Yes, it's different from the extraordinary historic 6- or 8-year run we had previously, but it certainly is a long way from grave,' said Steve Hyland, president of the St. Paul Area Association of Realtors."

"Hyland says the situation is due in part to problems in the sub-prime lending market, which is leading to greater scrutiny of mortgage products. But Hyland says the current flatness also derives from the over-exuberance of the market a few years ago."

"'There was an awful lot of activity, and an awful lot of homes that came on the market, and a lot of condominium projects that were built and developed, and there was such a quick turn and people were doing so well with pretty nice appreciation rates. And people thought 'Gosh, this is the way it's always going to be,' he says."

"Real estate experts say the current situation will improve if more sellers think realistically about how to price their homes. Twin Cities resident Al Heebsh recently learned that lesson. His family recently put their north Minneapolis home on the market. After a month of no showings, they lowered the home's price by $10,000."

"'That was what it took,' he says. "'We eventually sold it for $10,000 less than what we originally put it at, which was $5,000-$10,000 less than what we could've expected to get it for last year.'"

"Some builders even have lowered the price of their new houses to encourage buyers to drop the price on their existing homes. Mike Hartman, president of Hartman Homes in Hudson, Wis., for example, said that...in some cases he's dropped the price $10,000 to $20,000 on a new house to give his buyers additional incentive to sell their existing houses without giving up more of their equity."

"Hartman, in the business for 25 years, said sellers finally are realizing the market has indeed changed. 'A year or two ago, people selling a home wouldn't let go of that home and wouldn't drop that price,' he said. 'Now people are coming to an acceptance stage that their equity isn't what it used to be.'"

The Pierce County Herald from Wisconsin. "The real estate business has changed since Jim Nelson and Laura Canada started in it 11 years ago. While they used to get multiple offers on a single residential property, now they represent more properties than there are buyers for them, Nelson said."

"Besides the shift from a seller’s to a buyer’s market, the realtors faced ever-increasing complications in the metro. They’d begun by rehabilitating homes for interested parties, yet lately had to operate under conditions causing record numbers of foreclosures and vacant properties."

"'There are now over 1,000 registered vacant homes in the Cities and no one can inhabit them until they meet code compliancy,' he said."

The Journal Sentinel from Wisconsin. "Milwaukee home seller Rebecca Ahles moved into her $169,900 spanking-new condo on the city's near north side in May 2006. Her condo now sports a 'for sale' sign, asking exactly what she paid."

"'It's bad timing. I bought when the market was good - right before it wasn't good,' Ahles said. Considering selling costs, she said, 'I am taking a hefty hit.'"

"Ahles' condo had a $176,900 asking price in April, but she reduced it to reflect this summer's market realities. Sales and prices have taken a tumble in much of southeastern Wisconsin this year, the Metro MLS reported Wednesday."

"Its Milwaukee-area figures show that sales volume has shrunk 10.7% in a year's time. Average prices for broker-handled sales in most places look no better than 2006 and in some cases worse. Prices fell by about $23,000 to $295,453 in Ozaukee County; more than $10,000 to $297,136 in Waukesha County; and by about $1,200 to $230,947 in Washington County."

"Some drops are shocking. Glendale's average price has slipped to $201,448 from $217,245; Mequon's has slid to $455,409 from $479,139 and Mukwonago's has plunged to $269,581 from $299,404. Many communities are in the same discounted boat."

"'Supply has grown tremendously, even over the last year. It's extremely competitive out there - I don't think sellers realize how competitive,' said Jim Schleif, Ahles' listing agent."

"In a buyer's market, shoppers reign supreme, typically using their clout to reduce prices, Maddente said. Adding to price pressures has been a spate of 'short sales,' fast deals at low prices on properties being foreclosed for unpaid debts, said MLS Board President Tammy Maddente."

"Conditions are rocky, agents say. 'If your house needs work, is dated, or has some flaw, right now you're getting hammered,' said Dave Schmidt Jr., chairman of the Greater Milwaukee Association."

"'Most buyers just turn around and walk out' on an imperfect property, Schmidt said. 'Or you may get a lowball offer - 10% under your asking price.'"

"Amid Wisconsin's deepening mortgage foreclosure crisis, Legal Aid Society of Milwaukee on Tuesday announced an inquiry into what went wrong."

"'We need to find out who are the people being foreclosed, who are their servicers and original lenders, and what kinds of loans did they get,' said Catey Doyle, the organization's chief staff attorney. 'There are a lot of questions about who bears responsibility for this situation, (and) the only way to find out who the players are is to manually go through court files.'"

"The latest bad news on the Badger State housing front: 1,532 new property foreclosure court filings in June, according to a news release. That brings to 9,229 the number of Wisconsin households facing foreclosure this year, about 73 more homes each business day, said Robert Jansen, president of the Milwaukee-based foreclosure listing service."

"The hardest hit area is Milwaukee County, with 2,327 foreclosure filings this year."

"Early indications are disquieting. As the housing sector here slid from boom times to bad times, and as regulators urged caution, risky lending escalated."

"'Loans made in the last year got progressively more and more outrageous,' Doyle said. 'It was like a feeding frenzy. Now we're seeing 20 foreclosures a day on average in Milwaukee County, and sometimes 30.'"

"Jansen attributes Wisconsin's 23% surge in first-half foreclosures this year, on top of the 34% rise in 2006, to mortgage defaults tied to recent adjustable-rate and exotic loans plus soft housing conditions that prevent homeowners from refinancing or arranging a quick house sale."

"Foreclosed properties are returning to a market already clogged with too many 'for sale' signs and skittish shoppers, said economist Russ Kashian, an associate professor at the University of Wisconsin-Whitewater."

"'All foreclosures do is push down prices,' Kashian said. 'Talk to banks. They'll tell you that holding these non-performing assets on their balance sheets is not popular with bank auditors. They don't want these houses, so they dump them.'"

The Indystar from Indiana. "KB Home has had enough of Indianapolis' sluggish home-building market. The Los Angeles-based builder said Tuesday it will shut down local operations by the end of the year, laying off an unspecified number of employees and potentially leaving contractors and suppliers with one less source of business."

"'Due to the changing conditions and not seeing any improvement, it doesn't make sense for us to continue operations here in Indiana,' said Mark Rodocker, president of KB's Illinois division."

"In Central Indiana, single-family building permits had dropped to 7,500 by June, the fewest since 1991. Reasons include a drying up of cheap credit and lagging demand from buyers. Some builders are trying to hang on by cutting overhead and offering steep discounts."

"Just a month ago, Dave Berman, KB's then-Indiana president, said the company remained 'absolutely committed to Indianapolis.'"

"KB spokesman Jason Lindaman said the housing market is cyclical and likely will improve nationally, but KB did not predict a big enough change ahead in the Indianapolis market."

"'We have waited, hoping the market would improve,' he said. 'It just has not.'"