The Patriot News reports from Pennsylvania. "In 2004, James Dailey and his wife were renting and not looking for a house to buy. At parties, he said, people would look at them 'like we were weird.' 'That's how I knew we had made the right decision,' said Dailey. Now, Dailey and his wife...hope to find a house by spring between Hershey and Carlisle. He sees no reason to hurry. He's convinced prices on homes $400,000 and up will fall."

"A sharp increase in the number of homes listed for sale shows the midstate isn't immune from the supply glut that is slowing the housing market nationwide. In particular, local observers say the midstate market has a surplus of homes priced at more than $400,000."

"'There aren't as many buyers right now ...,' said Viola Thompson, president of Prudential Thompson Wood Real Estate in Hampden Twp. 'We have some gorgeous homes out there, and they are sitting.'"

"'Builders tell me they have reduced their homes by tens of thousands of dollars because they can't sell,' said Dawn Shughart, owner of Dawn and Associates Realty in Carlisle."

"She and other agents say home sellers in the higher-end range have been slower to adjust to the reality that they might need to lower their asking prices."

"Of 106 midstate homes newly listed one day last week, the asking prices for 95 of them had already been reduced before going on the market, Shughart said. That number usually is about 10 to 15."

"The pendulum has shifted to an over-supply in parts of the market, and buyers are cautious. 'What's wrong with a buyer's market? Half the clients we represent are buyers,' said Greg Rothman, CEO RSR Realtors."

From Chicago Business in Illinois. "On a late June afternoon, Laurence Kallen stepped to the podium in the Randolph Street office that serves as his cramped auction house. Mr. Kallen had 11 foreclosed Chicago properties to sell and 10 bidders in attendance. The auction lasted 10 minutes. He didn't get a single bid."

"'Two to three years ago I'd get up to 50 people,' Mr. Kallen says, gazing at a room of mostly unoccupied folding chairs. 'For a while it was like that every day. People were buying properties like mad.'"

"Not anymore. Despite a meteoric rise in foreclosures — 17,096 Chicago-area homes were foreclosed on in the first half of this year, up 46% from 2006 — the market for investors in foreclosed homes has been in steep decline."

"'It's counterintuitive,'" says T. J. McKinney, a Chicago-based investor. 'To be honest with you, there's less deals than there used to be.'"

"Foreclosed properties that don't sell at auction revert back to the banks, which pass them off to a real estate agent to sell, exacerbating Chicago's glut of unsold homes and threatening to push down home values."

"'If there's enough foreclosed property, it will definitely affect the real estate values in a neighborhood,' says Marvin Stockert, executive director of the Illinois Assn. of Mortgage Brokers."

"Because banks don't want to be landlords, or to pay the maintenance and property taxes on homes they've repossessed, they typically hand those properties over to real estate agents to sell at the market price."

"Many of those properties are concentrated in neighborhoods where prices are already under pressure. 'A lot of the foreclosed properties are south of the Eisenhower,' Mr. Stockert says. 'If you've got a real concentration, that really does hurt values in those areas.'"

The Chicago Tribune from Illinois. "More than a hundred people gathered Saturday in the Austin neighborhood as housing experts sought to raise awareness about an epidemic that has left in its wake a growing number of boarded-up houses across Chicago."

"The forum came as the number of new foreclosure cases in Chicago increased 36 percent over the last year, from 7,558 to 10,294, the biggest single-year increase since 1993, according to the National Training and Information Center." "More than half of foreclosures were on loans less than two years old."

"Michelle Rodriguez-Taylor, a housing organizer at the information center, said the problem has spread in Chicago neighborhoods such as Austin, where boarded-up houses highlight a 65 percent jump in new foreclosure cases since 1993."

"U.S. Rep. Danny Davis, whose district includes Austin, attributed the rise of foreclosures to homeowners signing mortgages without fully understanding the conditions of their loans. 'They've invested everything they have into a place they can call their own,' Davis said. 'And then they have that taken away and they don't understand why.'"

"Rodriguez-Taylor said many lending companies are skirting an Illinois law designed to protect borrowers from high interest loans by offering mortgages with adjustable rates that start as low as 4 percent but rise as high as 12 percent within a year."

"'We're seeing people paying over 50 percent of their income on their loans,' she said."

The Journal Sentinel from Wisconsin. "News about the housing market is keeping Tony Barnes from house hunting - not news from the media, but news from his brother in Minnesota."

"'My brother and his wife bought a house a year ago, and now they want another one, and they can't sell it,' says Barnes, who just...landed a job in Menomonee Falls. 'I don't want to get into something I can't get out of.'"

"Mortgage rates are reasonable, there's a huge selection of houses to choose from, and local house prices are flat or edging down. But buyers are holding back, say those in the real estate industry."

"Residential sales in Milwaukee are even slower than the national average. The Metro MLS reported last week that sales in the first half of the year dropped 11% compared with the first half of 2006. Sales were slowest in Washington County, down 26.3%, but lagged only 3.5% in Ozaukee County."

"'The lack of buyer confidence is holding back the market right now,' says Lawrence Yun, senior economist for the National Association of Realtors."

"'The fact that household formation has drastically slowed in an expanding market is very unusual,' says Yun. 'This implies to me that people want to wait it out and see how long this housing slump will last before making that commitment. We haven't encountered this buyer psychology in the past.'"

"The psychology that homeowner Lynn Bednarz sees is endless house hunting and procrastination."

"She has been trying to sell her Wauwatosa 1920s-era brick house since last fall. She has dropped the price to $345,000...and now is throwing in a brand new car, all in an attempt to convert just one foot-dragger to a contract-signer."

"'A lot of people I know want to sell,' says her broker, Pam Jerzak in Waukesha. 'But they say, 'Because the market is in the tank, I don't want to buy, because I can't afford two mortgages.' They might let their dream house go by.'"

"The number of mortgage applications is up, too, but that could be a mirage, says Yun, because higher lending standards are forcing some applicants to apply several times before being approved."

"First-time buyers are hardest hit by more stringent lending standards, says Christopher J. Callen, senior VP of lending for Brown Deer-based Bank Mutual, which has 22 offices in the Milwaukee area."

"'A couple years ago, on an adjustable(-rate mortgage), we would write the loan at the then-current interest rate. But today we look at the monthly payment, fully indexed, and for interest-only loans you're looking at the interest rate fully indexed plus amortization, and from that point of view, can the borrower afford this mortgage?' he says."

"Refinancing volume is down, too, he says, because homeowners with low rates aren't likely to give them up to move to a new house. 'If I own a house, there's a sense of hesitancy. I can have a great selection of houses to buy and a good price, but can I sell my house?'"

"Bednarz vows that when her longtime home finally sells, she will be buying in a warmer climate, answering the prayers of some stressed seller."

"Or maybe not. 'There's a lot out there to look at,' she says. 'I might wait. I guess that makes me one of the people I'm complaining about.'"