A report from the Idaho Statesman. "Pam Hannam was hoping for a fresh start when she left San Diego for Idaho almost three years ago. Since arriving in October 2005, Hannam has purchased a duplex for $127,000, then tried to sell it, only to discover she owed more than the property was worth. She finally abandoned it to two different lenders, who foreclosed on the duplex in Caldwell."

"'I moved here with so many hopes and aspirations. And the first day people were flipping me off because of my California license plate,' she said. 'How did things go so wrong?'"

"Boise State University business professor Gundars Kaupins said the nation's dilemma is the result of skyrocketing home appreciation rates combined with lenders who were eager to fund even the riskiest loan. 'There was this element that life would go on like this forever,' Kaupins said."

"'A lot of people bought these homes as investment properties, and now they're losing their shirts,' said U.S. Bankruptcy Court Trustee Bernie Rakozy. 'They were trying to make a quick buck, and the truth is now hitting them in the rear because the homes were way overvalued.'"

"Demand for residential building permits reached their lowest point of the year in July, as Ada and Canyon counties issued the fewest permits for any month this year."

"Experts say builders have scaled back on their construction plans this year, hoping to give the market time to absorb an inventory of almost 8,000 unsold homes."

"Individually, Boise, Meridian and Nampa issued 27, 48 and 24 permits, respectively. Through July, Ada County issued 45 percent fewer permits than for the same period a year ago. Canyon County was off even more with 61 percent below the comparable period a year ago."

"'What those numbers tell you is that there are a lot of people who are no longer builders,' said Buildingcredibility.com founder Trey Langford."

"Also hurting some high-end builders is the fact that buyers recently have been concentrating on homes priced between $200,000 and $250,000. 'I think anybody who built anything over $400,000 is pretty puckered up about now,' said Don Hubble, president of Meridian-based Hubble Homes."

"Recent Intermountain MLS data shows that sales in the Valley last month were 26 percent below the numbers for July 2004. Moreover, the July permit numbers in Ada and Canyon counties were 69 percent and 54 percent below 2004 numbers, respectively."

"Rod Blackstead, president of Blackstead Building Co., said builders have had to 'go back to the basics.' 'That means building at the right location, at the right price and on the right land,' he said."

"About the only good thing happening for home builders is that land prices have come down significantly from the days when ground in northwest Meridian was going for $165,000 an acre. 'I think that price has come down anywhere from 40 percent to 50 percent,' said."

"Marc Leibowitz is the new executive officer for the Ada County Association of Realtors, where he has been working to convince everybody he meets that the slowdown in the local residential housing market is not as bad as it appears."

"Q: With almost 8,000 homes on the market, isn't it going to be a while before the market recovers here?"

"A: 'I see it differently. When there is a greater opportunity for you to buy a house, that's when you want to buy a house. So from the buyer's side, excess inventory is not a bad thing. Right now, you have five times the number to choose from than you had 90 days ago. That's a good time to buy a house.'"

The Bend Bulletin from Oregon. "Life in Central Oregon’s sluggish real estate market is a double-edged sword this summer. On one hand, for first-time buyers with good credit and some savings, life is good. There are plenty of homes to look at and plenty of sellers willing to cut a deal."

"For sellers, though, the laws of supply and demand could be conjuring little more than gloom."

"Things have gotten to the point in the local markets, especially for home builders on recently purchased land, where prices can’t sink much further without inviting losses, Redmond-based agent Pam Lester said."

"'I don’t expect prices to go anywhere but up from here,' Lester said, 'because they can’t go any lower.'"

"In Bend, 1,588 single-family homes on less than an acre were listed for sale on Aug. 6, according to Bratton Appraisal Group’s Mike Caba, more than 11 months’ worth of inventory based on average monthly sales over the past 12 months."

"In Bend, the inventory bulge is at its worst in the $400,000-and-under price range, which accounts for more than 68 percent of the homes for sale, according to Bratton’s graphs."

"It’s no accident that that’s the price range most production builders build in, and the price range that attracted the heaviest interest from speculators and investors during the boom years, Lester said."

"Some of the speculators who tried to flee the markets beginning in June 2006 when it showed the first signs of weakness, are still trying to sell homes, although many in Redmond have given up and rented them out, Lester said."

"Builders, meanwhile, are trying to keep their operations moving, but they’re forced to wheel and deal to sell the fewer homes they are building. Asking prices also are dropping as sellers adjust to the new market realities, said broker Bill Berger."

"Average list prices in Bend dropped from $533,481 on all types of housing in May to a little less than $467,000 in July, Berger said."

"'The buyers tend to be first-time home buyers,' Lester said, 'because they don’t have to go out and sell a house first in order to do it.'"

The Whidbey News Times from Washington. "There’s little doubt that the subprime mortgage crisis has affected Whidbey Island and will continue to do so for some time."

"'The market slowed down about a year-and-a-half ago and went back to normal,' said broker Rick Schutte. 'For about three years before that we were in a highly-funded market.'"

"Schutte feels that North Whidbey is pretty well insulated from subprime problems because of the military population and the number of loans guaranteed, in portion, through the U.S. Department of Veterans Affairs."

"Gregor S. Strohm, ASA, a real estate appraiser in Oak Harbor, sees things a little differently. 'It’s going to get worse before it gets better,' he said."

"Strohm...says the subprime crisis gradually killed off the real estate frenzy of two years ago. Back then, it wasn’t uncommon for buyers to bid against each other and for sellers to enjoy sales above the listing price."

"But no more. 'Some people are going to have to sit back and lower the prices of their homes,' he said."

"He said Whidbey Island doesn’t operate in a vacuum. Interest rates are up and banks are tightening up lending practices. 'People who would qualify two months ago now may not qualify,' he said."

"In July, 58 homes were sold on North Whidbey, as compared to 78 homes in July of 2006. In July, 379 homes were listed for sale, while there were only 260 a year before."

"Home prices are also down. The 12-month moving average price on North Whidbey is down about $10,000, from a peak in February of $302,131 to $292,173 last month."

"One impact she does see from the subprime crisis, said Realtor Marilyn Sherman Clay, is fewer number of people selling their homes in California for huge bucks and scooping up prime real estate on Central Whidbey."

"'Prices are still holding, though they aren’t as good as they were two years ago,' she said."

The Bellingham Herald from Washington. "In 2002, Washington state’s then-Attorney General Chris Gregoire came to Bellingham to announce what was billed as a historic legal settlement with mortgage giant Household International that would curb nationwide abuses in subprime mortgage lending."

"After the Household International episode and several similar cases gave clear evidence of the risks, many are wondering why subprime lending excesses were allowed to go on unchecked until the mortgage system went into a tailspin."

"Joseph Mason, associate professor of finance at Drexel University, has done extensive research into the financial underpinnings of the subprime mortgage industry. As he sees it, the potential for disaster in the subprime lending arena should have been obvious before, during and after the Household International affair."

"'Household was among a number of aggressive players,' Mason said. 'It was not unique in its business model....By not cracking down after seeing this kind of behavior, regulators allowed it to grow and become standard industry practice.'"

"Chuck Cross was the Washington Department of Financial Institutions’ lead investigator in the Household International case. 'We had all these dollars coming off Wall Street, looking for these high-return investments,' Cross said."

"'Sound underwriting was just thrown out the window. Wall Street wasn’t asking the questions. Nobody was doing due diligence. You had greed meeting up with naiveté,' he said."

"Washington Attorney General Rob McKenna said the burgeoning subprime mortgage business fed on itself. 'Credit was too easy,' McKenna said. 'The sale and resale of mortgages accelerated.'"

"Now, with investors yanking their money out of the subprime financing system, wouldbe homeowners with less than great credit histories may find it harder than ever to get a loan."

"'The music has stopped,' said Bob Parlette, the Wenatchee attorney who sued Household International on behalf of Whatcom County clients. 'The people without a chair are going under.'"