The Tracy Press reports from California. "The number of houses on the market in Tracy, 946, is closing in on the total number of houses built in town at the peak of the housing boom in 2004, the last year the city added more than 1,000 houses. At the same time, RealtyTrac reported this month that 1,138 Tracy homeowners had received notices of default. As a result, homeowners have slashed their asking prices to 2004 levels."

"'Actually, I’d have to say it’s a little lower than that,' said local broker Dave Konesky, a director with the California Association of Realtors."

"Konesky said one of his clients bought a Tracy house in 2004 for $430,000 and now is asking $419,000, 'with no bites, and it’s a beautiful home,' Konesky said." "He said that’s about as low as the homeowners want to go. 'They said they’ll sell it for less than they paid for it,' he said, 'but they won’t give it away.'"

"This summer, the median asking price for existing homes in Tracy, Banta and Mountain House dropped below the median sales price. As of this week, that price was $475,000, $35,000 less than in mid-July. Local real estate agent Donna Baker said that of the 946 homes for sale in Tracy right now, about a third either are bank-owned, meaning they’ve been through foreclosure, or are 'short sales.'"

The Recordnet. "Homeowners in the upscale Paseo West development in Manteca are getting organized to see whether they can convince Lodi-based Anderson Homes to change plans to auction off 34 homes next month."

"Owners of 26 homes there think the home builder is treated them unfairly and in bad faith by planning to auction off vacant or under-construction homes at prices that could be more than $200,000 less than what current residents paid for their homes within the past year, said Dave Cantrell, one of the first to buy a home in the subdivision.

" "'We're looking at a loss of potentially up to a quarter million dollars (per home),' he said."

"Earlier in the week, Craig Barton, Anderson Homes chief financial officer had said the slow housing market had pressured the company to turn to auctions as a way to sell homes in the partially finished subdivision. Otherwise, the homes would remain vacant for the foreseeable future, he said, and that wouldn't be good for the neighborhood."

"Cantrell said he doesn't like the empty houses around his house, 'but at what cost do we fill these?'"

"Stockton resident Zelda Falkner said Thursday that she and her husband will be checking out homes in Anderson Homes' Teal Landing development in Los Banos. Twenty-five homes in that development will be auctioned off Oct. 14 in San Jose with minimum bids starting at $215,000."

"The Falkners want to live closer to friends there, and they're hoping to get a great deal on a new home and would pay cash. She wouldn't feel a twinge of guilt if they snagged a great deal, Falkner said, 'because I'd be getting a bargain.'"

From News 10. "In some cases, the starting bids are about half of what some current homeowners paid for nearly identical homes just over a year ago."

"'They didn't treat us very good as far as I'm concerned at all,' said Amy Sturdevant who in August 2006 paid $585,000 for her family's four-bedroom, two-bathroom home. Now, a nearly identical home with the same floor plan right across the street from Sturdevant is set to be auctioned at a starting bid of $295,000."

"Barton said this is their neighborhood, too. He said that they will keep building there. 'This is the right decision for us,' Barton said. 'In this type of market, the auction will tell us what the current fair value of the homes is.'"

"Barton said it's not because they're in financial distress but instead to spur a sluggish market."

"'I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,' Cantrell said."

The Press Enterprise. "Home construction is falling more dramatically in Riverside and San Bernardino counties than anywhere else in the state, as builders put on the brakes until they sell a glut of completed houses and wait for the market to rebound."

"Steve Johnson, a director of Metro-Study, said even homes for which builders have obtained permits from counties and cities may not get built. He said there are about 15,000 permits for single family homes that recently were close to expiring."

"There are also 27,000 lots prepared for new homes on which construction has not begun, he said. Johnson said a majority of the empty lots are in emerging housing markets such as Banning, Beaumont and south Riverside County."

"Alan Nevin, chief economist of the state builder's association, said (buiolders) are trying to ignite buyer interest with price cuts and a host of other incentives."

"'Now is the time to buy,' said Frank Williams, CEO of the Baldy View chapter of the California Building Industry Association. 'If buyers go to the builders they can pretty much cut their own deals.'"

"To sell homes, he said some builders are willing to just break even while others are taking losses. He said all are laying off personnel and he believes there is 'a good chance' that some Southern California home builders will go out of business."

The County Sun. "From the 15 Freeway, Rosena Ranch is advertised with great fanfare. Flags are waving. Signs and banners lead drivers into a newly paved and planted community of homes. But then the excitement stops."

"Construction is coming to an end - at least temporarily - at the project just north of Fontana off Glen Helen Parkway where the developers, Lennar Corp. and SunCal Cos., once envisioned a school and 2,100 homes."

"Now there are fewer than 100 houses and no indication of when new foundations will be poured."

"In Rosena Ranch, 54 homes are occupied or ready for occupancy, and when "a handful" more are finished, it's not clear when construction will continue, Rynerson Rock said."

"'My staff says they have been frighteningly quiet, and that's not typical for them,' Rynerson Rock said of the developers working on the project."

"But the developers are continuing to plan and seek county approval for their homes, Rynerson Rock said."

"Chino's director of community development, Chuck Coe, said building has slowed at The Preserve but that no one is talking about making changes to the project. 'There's no panic or going back and rethinking,' he said."

"Rynerson Rock said the developers are being prudent. 'We don't want them going out of business, going broke and never being able to come back again.'"

The Appeal Democrat. "If misery loves company, area residents trying to sell a home should be feeling plenty of love. The Yuba-Sutter market’s 35 percent drop in housing sales between August 2006 and August 2007 puts local homesellers in the same lousy neighborhood as nearly everyone else, according to numbers compiled by the Sutter Yuba Association of Realtors."

"Comparing August to August sales, Yuba-Sutter weighed in with a relatively steep median sale price drop of 8.1 percent – $290,000 to $260,000, according to the SYAR numbers. Yuba City Realtor Lloyd Leighton noted that in December 2005, when the area’s house prices peaked, the median sale price was $315,000 – 17.5 percent higher than in August 2007. 'That’s been a pretty dramatic decrease over less than two years,' Leighton said."

"Among the reasons for downward pressure on prices, he said, is the continuous growth of new housing developments. 'The new homes compete with all the other homes,' he said."

"Companies like Lennar, which cater largely to first-home buyers, are under increasing pressure, 'to sell their product, even if it means lowering price and sacrificing profit,' Leighton said. 'They’re offering huge incentives.'"

The Orange County Register. "Mid-September sales data from DataQuick show further evidence of how that midsummer credit crunch has iced an already chilled O.C. real estate market. Sales for the 22 days ended Sept. 14 are off 35% from a year ago. The mid-September median for all residences of $605,000 is the lowest since January; 4% below a year ago; and 6.2% off June’s peak."

"Sales of new autos plunged 17 percent in Orange County in August, one of the steepest drops in memory, the Orange County Automobile Dealers Association reported Thursday."

"'Blame it on housing,' said Art Spinella, auto market analyst for CNW Market Research. 'Buying a car with a home equity loan is a California pastime and when home equity drops, it's tough to get a home equity loan.'"

The Union Tribune. "San Diego County's leading economic indicators took a sharp plunge in August, according to a report released yesterday by the Burnham-Moores Center for Real Estate at the University of San Diego. All six components used in the index were negative last month."

"The index fell 1.4 percent in August. That is the steepest decline since 1979, although USD economist Alan Gin, who compiles the index, cautioned that there may be some upward revision. The index has fallen 16 of the past 17 months."

"'Things are pretty bad,' Gin said. 'Not only are all the components down, but they're down by hefty amounts.'"

"At the center of the economic problems is the continuing decline of the local housing market. 'There's a connection to the weakness of the housing market in every one of the components,' Gin said."

"'This is very painful for homeowners, but for an economist it's a good sign. It may begin to correct the housing price imbalance,' said Stephen Levy, who heads the Center for Continuing Study of the California Economy in Palo Alto, referring to the gap between high home prices and relatively stagnant incomes."