A report from the Washington Post. "If 2006 was the year the boom market began to fade, 2007 is shaping up to be the year that beach communities along the Delaware, Maryland and Virginia shorelines see their economic engines, largely driven by tourism and real estate, downshift from overdrive, economic and tourism analysts say. That means job and income growth is slowing, vacations are being scaled back, and real estate opportunities have shifted in favor of buyers."

"To lure buyers and ameliorate losses, developers have slowed their pace of construction, dropped prices, advertised upgrades as standard features and then offered discounts on land they haven't built on yet."

"In the Hampton Roads-Virginia Beach area, the value of single-family homes for which building permits have been issued declined about 16 percent, according to an analysis by Old Dominion University. In Ocean City, the pace of development has slowed considerably; the city has approved new construction worth $69.9 million for the first seven months of the year, down 32 percent from the comparable period last year."

"The trends, at least in the real estate market, are working in the favor of Susan Gordon, a former Bethesda resident in the market for a condominium or townhouse in Rehoboth."

"She's considering a property along the canal, Blue Point Villas, where the developer is offering to pay her mortgage for six months, plus six years of condo association fees, $5,000 toward closing and a 15 percent 'developer closeout' discount on the sale price."

"'Builders are getting so low on prices, it's getting down to materials,' (realtor) Steve Conlon said. 'They're already dropping prices 20 percent, then people come in and think they're going to get 25 percent off that.'"

"Fairfax County officials are predicting that the budget shortfall for the coming year could hit $120 million because the slumping real estate market has led to the lowest annual revenue rate increase in 15 years."

"Throughout Northern Virginia, local governments are grappling with falling home sales and prices and more foreclosures, which are driving down real estate assessments. About 60 percent of Fairfax's revenue comes from real estate taxes."

"'All of us are in the same boat in Northern Virginia,' said Board of Supervisors Chairman Gerald E. Connolly."

"Deputy Fairfax County Executive Edward L. Long Jr....said that the number of home sales had dropped, prices had leveled off and the number of home foreclosures had risen sharply, from 190 in the first six months of 2006 to 987 so far this year."

"There are similar spikes in foreclosures elsewhere in the region. In Loudoun County, there were 66 foreclosures recorded in 2006. For roughly the first half of this year, there have been 188."

"In Prince William County, there were 40 for all of 2006 and an estimated 300 in the first six months of 2007, according to each county's commissioner of accounts. In Montgomery County, 1,238 homes were lost to the lender in 2006 and 1,824 in about the first half of the year."

The Examiner from Virginia. "The sharp dip in property values that forced Prince William County into its first spending decrease in 15 years this spring is lasting longer than officials originally anticipated and is looming over preparations for next year’s budget."

"Home sales have fallen off 40 percent from June 2006 to June 2007, and appraisal values could fall as much as 8 percent, officials said."

"'We’ve really seen the bursting of the bubble,' Prince William County Chairman Corey Stewart said. 'That’s going to affect our budgets for at least two years.'"

"'We had hoped that come this spring, things would begin to improve. … They have not,' said Chris Martino, Prince William County director of finance. 'We’re basically where we were all last fall and continuing to trend down.'"

"While 732 property sales accounted for $316 million in June 2006, the 456 sales in June 2007 registered just $186 million. With more than a year’s supply of vacant homes for sale, the average house sits on the market for 106 days, he said."

"Martino anticipated a 2 percent drop in property values this year, but new estimates based on soft figures show the decline could quadruple, he said. 'We do not know where it will land,' he said."

The Baltimore Sun from Maryland. "A major mortgage lender filed for bankruptcy-law protection yesterday and other financial companies curtailed lending or laid off employees as the end to easy credit on Wall Street continues to trickle down, leaving consumers with fewer choices for home loans."

"American Home Mortgage Investment Corp. filed for bankruptcy-law protection after laying off several hundred employees in Maryland and thousands across the country in recent days. Also, First NLC Financial Services closed an office in Greenbelt and subprime lender Fieldstone Investment Corp. of Columbia stopped accepting new loan applications last week."

"Cleveland-based National City Corp.'s home equity unit suspended additional loans or lines of credit yesterday, and Houston-based subprime lender Aegis Mortgage Corp. said it would not accept any more applications."

"Mortgage brokers who remain in business say they are no longer able to offer many of the loans that became the rage during the housing-market boom but led to a spike in defaults and foreclosures."

"'As the mortgage market shrinks because investors are drying up, you're going to see more of this,' said Joseph E. Rooney, deputy commissioner of Maryland Office of Financial Regulation. 'It's a huge problem from Wall Street to Main Street.'"

"Nationally, about one-seventh of subprime borrowers were more than two months late on payments in May, almost twice the rate from a year before, data from First American LoanPerformance show. Foreclosure rates for subprime borrowers also doubled to nearly 5 percent. In Maryland, one in 10 borrowers were delinquent."

"'It is unfortunate that American Home Mortgage, a company which we built into a highly successful business, experienced this sudden reversal of its fortunes due to the unanticipated and rather sudden deterioration in the secondary and national real estate markets,' the company's CEO, Michael Strauss, said in a statement yesterday."

"Columbia-based Fieldstone stopped accepting new loan applications last week. Several Fieldstone employees, who did not want to comment publicly because of corporate policy, said yesterday that the company laid off some headquarters staff Friday."

"First NLC Financial Services shuttered offices last week, including its Greenbelt branch, where it laid off about a dozen workers. The company, which specializes in subprime mortgages."

"'Unfortunately, we had to let some people go in order to compete in the marketplace as it is today,' said Andrew Henschel, a vice president of corporate governance. 'It's a very, very difficult time.'"

"Christopher Ortiz of Neighborhood Housing Services of Baltimore Inc. said that problems arose with subprime loans because unscrupulous brokers and lenders extended loans that many buyers couldn't afford over the long term."

"'Housing prices haven't sunk significantly, and credit standards have tightened,' Ortiz said. 'How much money can you put down if you are low-income? Chances are you can't save that much even though you have the dream of home ownership.'"

"Charles DiPino, president of the Maryland Association of Mortgage Brokers, called the mortgage industry shakeout the 'natural progression' of a cycle in which the housing boom and credit expansion inflated the ranks of those in the business."

"'If your home purchase was closing tomorrow and your lender is going out of business, you're going to have to start all over, and that's a scary situation. That's where people are scrambling.' said DiPino."