12 News reports from Arizona. "Real estate people can usually find the sunny side in any piece of bad news. These days, they've stopped looking. The consensus today is this is the worst Valley housing market in 10, 15, even 20 years, and the mess is spreading. 'We all knew it was coming,' said Patricia Garcia Duarte, executive director of Neighborhood Housing Services of a Phoenix non-profit that counsels home buyers."

"'As we look at some of these people we say, how could you have ever qualified for a $300,000 loan when your total income is $40,000 a year?' said Mike Sullivan, director of education at Take Charge America, which counsels people struggling with debt."

"Today we're seeing the result: Just 5,000 homes sold in the Valley last month, but almost 3,000 foreclosures. And 55,000 homes on the market, 20,000 more than in a 'normal' market."

"In a Valley economy where an estimated 1 in every 3 jobs is in some way connected to real estate, more jobs are at risk. Countrywide Lending, the nation's leading home lender and a major Valley employer, is warning that the housing bust poses a serious threat to its business."

"'This is all a snowball,' Sullivan said, 'and the bigger the snowball gets, the harder it is to stop.'"

From KTAR.com in Arizona. "Realtor Russell Shaw says most of the foreclosures are happening on what he calls the edges of the Phoenix area. 'Buckeye, Goodyear, Chandler, that kind of thing, Apache Junction, Queen Creek. That is where the bulk of the foreclosures will occur.'"

"That's where land is plentiful and many investors bought houses they now can't afford. As for the future, Shaw says things will stay this way for awhile, but 'it's just almost like Nostradamus. I've seen the future. It's a lot like the past, only longer. So, nothing phenomenally bad is going to be happening.'"

"'It's not that the lenders who take them back are going to try to dump them at low prices, they're just going to be selling them at market. But it does hurt the area,' says Shaw."

The Arizona Daily Star. "Several key private-sector projects meant to be the backbone of Downtown (Tucson) redevelopment have been stung badly by the housing market downturn and won't be completed until at least 2009, stifling progress for Rio Nuevo."

"The theory that private residential development would jump-start other redevelopment Downtown hasn't panned out, said Jaret Barr, assistant to the city manager. 'It's clear it's not happening,' he said."

"In their bottom lines, many of the financial plans for residential development Downtown assumed the high prices seen during the real estate boom would continue, said local developer Randi Dorman. 'Some plans need to be recalibrated' to reflect changes in the marketplace, Dorman said."

In Business Las Vegas reports from Nevada. "The median price of Las Vegas homes fell $10,000 in July to the lowest point since March 2005, starting what some observers suggest may be a major correction in the existing home market."

"The price drop occurred as the inventory of homes listed for sale continued to set records in July with a combined 30,000 single-family homes, condos and town homes on the market. Not only were new listings up 2.5 percent for single-family homes, but sales of homes listed on the service fell nearly 11 percent from June to 1,318." "That's 34 percent below sales totals a year ago."

"'It is not as good as we had hoped,' said Devin Reiss, president of the Realtors group. 'The inventory has been going up and prices had been holding steady, but it was a matter of time, with as much inventory as we have, to see a slipping in the median price. Unfortunately, that is the way it is heading at this point.'"

"But with Las Vegas' resale housing inventory sufficient for 14 to 16 months, well above the national average of six to seven months, something was bound to give, analysts said."

"'I think we expected this, and we expect prices will continue to soften,' said Ken Perlman, VPt with San Diego-based Sullivan Group Real Estate Advisors. 'The market is adjusting to what people are willing to pay. And buyers are influenced by the fear about the market. They don't want to buy when they think prices are going down.'"

"A homeowner may have a neighbor whose house sold for $600,000 in 2005, and there now is no way they could sell their own home for $500,000, Perlman said. They eventually change their minds when they see what's happening in the market, he said."

"'This has got a ways to go,' economist Chris Thornberg said. 'Las Vegas has gotten way overbuilt and has some problems. When you look at the price of homes and incomes, it is just not sustainable.'"

"Between 2002 and 2006, the median price of resale homes rose nearly 97 percent from $145,000 to $285,000 last year, according to SalesTraq, a local housing tracking firm. The biggest jump was 40 percent in 2004."

"Local housing analyst Steve Bottfeld predicts a boom in 2009, said July is typically a slow month for sales. Thornberg dismisses suggestions by Bottfeld and others that the housing market will recover when resorts open on the Strip in the next two years and other people move into the market. Casino jobs and other jobs created in Las Vegas don't generate enough income to deal with affordability, he said."

"'It doesn't matter,' Thornberg said. 'It is a function of price and income. If you can't afford it, you can't afford it. It is that simple.'"

The Las Vegas Business Press from Nevada. "Las Vegas Valley land values are seeing a slight dip due to rising development costs, increased interest rates and a housing market slowdown, according to a new report. Median vacant land prices were $718,500 per acre in the second quarter, $90,600 less than the previous year, according to Applied Analysis."

"The average sales price was $16.49 per square foot in the second quarter, an 11.2 percent drop from 2006."

"'Demand for raw land continues to be impacted by several factors, including the performance of the residential market,' said Jeremy Aguero, principal of Applied Analysis. 'This shift in market demand during the past several quarters is reflected in sales volumes, which have pulled back significantly.'"

"'The impacts associated with softening demand for land were partially offset by landowners' unwillingness to sell at deep discounts, forcing property values to remain relatively stable,' said Brian Gordon, principal of Applied Analysis. 'Should residential conditions worsen materially or population growth slowdown substantially, the likelihood of price reductions may be a reality.'"

The Las Vegas Sun from Nevada. "Our valley's top real estate experts have long been predicting a short slump with minor price corrections of less than 10 percent. The folks I talked to counted on our dynamic economy, a continuing influx of new residents and the coming wave of Strip resort development to keep the slump short and relatively harmless."

"I believed them, and wrote in January that I expected the sluggish real estate market to improve by the end of this year. I was wrong, and was too optimistic."

"The people I feel sorry for are the regular folks. Their home is often their biggest investment, and they've been failed by a market that didn't rein in the aggressive businesses that gambled on continuously increasing prices."

"Prices for new and resale homes continue to slowly but steadily drop, bad news, maybe, for people who hoped to make a quick profit on home sales, but a glimmer of good news for champions of Las Vegas as a town of blue-collar homeowners."

"By spring and summer 2006 Las Vegas had priced itself out of reach of the very people who run this town, teachers, rank-and-file cops, hotel maids, food servers. The people who were needed to work here couldn't afford to buy a home here."

"Or they got in over their heads with seemingly attractive mortgages that came to haunt them, and they had to bail. That's one of the reasons Las Vegas has one of the highest foreclosure rates in the nation."

"Just look at what's happened during the past year: for-sale signs everywhere, nobody is buying and prices are dropping."

"By some accounts, prices would have to come down 33 percent from their peak to be affordable."

"In the first quarter of 1999, 78 percent of homes for sale were within reach of a family earning the median income, according to real estate economist John Restrepo. By the end of 2006 only 14 percent of homes were affordable to those families."

"A downward correction in home prices should be good news not just to Nevadans who have delayed or abandoned hope of buying a home, but to employers struggling to recruit workers."

"'I think you would have to have a huge drop for a lot of people to be able to afford a place to live,' said Somer Hollingsworth, head of the Nevada Development Authority. 'When you are making $30,000 to $35,000 to $40,000 a year, there is not much they can afford.'"