A report from the Arizona Republic. "The 3,050 recorded sales in September 2007 heralds in the local resale housing market's traditional period of doldrums. The activity of September followed August 2007 at 4,240 sales and was below last year's 4,875 transactions. The month of September brought the year-to-date total to 40,800 sales, which is well below the 52,390 for 2006 year to date and 88,750 sales for 2005 year to date, according to real estate experts for Arizona State University."

"'Even in an uninspiring market, there are potential buyers that cannot get the needed financing due to tighter mortgage underwriting guidelines,' said Jay Q. Butler, director of Realty Studies in the Morrison School of Management and Agribusiness."

"The combination of large inventories and low interest rates have enabled people to purchase more expensive homes, which is one reason the county median price has remained fairly stable. However, continuing concerns in the nonconforming mortgage market (mortgages above $417,000) have begun to adversely impact the move-up market."

"Foreclosures and new homes are providing a competitive alternative to the resale home in many areas of the market. New home builders have been aggressively pursuing buyers through incentives such as specially priced up-grades, free pools and gift cards."

"'Because of these tactics, the 2007 resale housing market is showing signs of increasing weaknesses that could drive it below the expectations of even a few months ago,' said Butler."

"'Brutal' and 'perfect storm' are some of the descriptions local economists now use to describe economic conditions in Maricopa County."

"I think this will be a brutal year,' said Dennis Hoffman,an Arizona State University economist who helps guide sales tax forecasts for the state."

"In an interview, he said 'I think it has a lot to do with the fact that our local sales tax revenues are tied to this new house-new car phenonomen, decorating the house, doing maintenance and repairs and adding new carpeting, furniture and fixtures.'"

"'It is kind of humorous when you walk on the (auto) lot. You are treated like the messiah returning,' Hoffman said. 'The deals are incredible. It's a great time to be buying an automobile.'"

"Economist Elliott Pollack reiterated that the housing market is a serious worry because there are so many houses on the market and lending standards have become tougher. Also the housing slump could slow migration into the state because homeowners in other states can't sell their houses to move here, he said."

"'We especially have a perfect storm in the housing market,' he said."

"Jay Butler, director of Realty Studies at ASU, said some housing prices are improving in some areas, such as east Mesa, and falling in others, such as Surprise and Queen Creek."

"Apartment rents are stalling to fall, in part because of competition from apartments that were going to be converted to condos that are now reverting to apartments."

"'The housing market is structurally about where it should be,' he said. 'We have got to get the overhang down where it should be. That is going to take several years.'"

"The Southeast Valley's housing market continued its slump. The Mesa ZIP codes 85213 and 85215 posted slight gains while the rest of the Valley's home values fell."

"'There's a gigantic inventory out there,' said Cindi Dewine-Barebo, a real estate agent who specializes in the Southeast Valley. Dewine-Barebo estimated there are 56,000 homes for sale in the Valley right now."

"'In the heyday (2005), there were 7,000 homes,' she said."

"Dewine-Barebo said falling values represent an overdue market correction. But she tells sellers that they need to be realistic and not 'get hung up' on an asking price that doesn't reflect today's market."

From Builder Online. "Ashton Wood Homes, the industry's 37th-largest builder last year, reported yesterday that its orders, closings, and net income were hit hard during the three months ended August 31."

"Like many builders, Ashton Woods finds itself in a bind, where it can't sell homes without discounting, but where discounting only encourages buyers to think that lower prices are around the corner."

"'[T]he demand for new homes has declined as consumers continue to see home prices adjust downward, which has contributed to the weakening of consumer confidence,' states Tom Krobat, Ashton Woods' CEO."

"During the quarter, the average sales price of this builder's homes fell 7.9 percent, to $270,000, with the biggest dip - 33.3 percent - in the Phoenix market, to $305,000. 'Phoenix is one of the more depressed [housing] markets, with a tremendous price problem,' Krobat told BUILDER during an interview."

The East Valley Tribune from Arizona. "Developers of the planned Gilbert Esplanade have sold the property, becoming the second builder of a major retail center to announce an ownership change in less than a month."

"Officials with Phoenix-based De Rito Partners said they decided to sell the site at Gilbert Road and the Loop 202 Santan Freeway to an Ohio-based firm when it was unable to fill an anchor space."

"Dawn McLaren, a research economist at Arizona State University in Tempe, said retail developers are feeling the new realities in the housing market. 'Things have changed in Arizona,' she said."

The Review Journal from Nevada. "The Silver State had the country's highest foreclosure rate for the ninth consecutive month in September. Monthly single-family home sales are falling dramatically against a staggering inventory of unsold properties."

"The MLS has more than 30,000 single-family homes, condos and townhouses for sale in the Las Vegas Valley. Rick Brenkus, co-owner of two local Keller Williams Realty offices, sees uncertainty in both buyers and sellers sitting on the sidelines, holding out for a better deal."

"Some potential buyers think this 18-month inventory of homes warrants a 20- to 30-percent price plunge, he said."

"'You have to get rid of that inventory before any real recovery can take place,' said Dennis Smith of Home Builders Research. Yet at some auctions lenders have been unwilling to discount foreclosed properties more than 20 percent or 25 percent from listed prices, he wrote."

"But Guy Deiro, president of a local real estate brokerage, auction and liquidation company, said he recently has seen more lenders and individual sellers willing to compromise. In the past month, he said, about 80 percent of the sellers accepted final bids at his auctions."

"'Lenders are starting to figure it out, what the story is in terms of where they have to go down to,' Deiro said. 'As the month goes on, everyone seems to get more realistic.'"

"Smith suggested lenders follow the example of home builders that have aggressively unloaded their inventory and move on."

"The new home market has a much leaner inventory than the resale home market, about one to two months' worth, McCormick said. Area builders sold 1,970 new homes in August, about double the number of building permits issued that month."

"Presold properties have long been a mainstay for Astoria Homes. Nonetheless, the company was caught off guard when it lost about 25 percent of its buyers because of the subprime crisis."

"'These are people who had bought from us and told us they had a loan, and the lender went broke, so the buyer never closed,' McCormick said. 'That is why we had a sudden burst of inventory.'"

"Astoria Homes bolstered its financing promotions with other incentives, including lot premiums, customized upgrades and discounts that created savings upward of 15 percent off the sales price, he said. The builder expects to sell its remaining homes, which totaled about 60 early this month, by the end of the year."

"The Greater Las Vegas Association of Realtors reported 990 single-family home sales in September, down 24.8 percent from the previous month and down 43.1 percent from September 2006."

"As a sign of the times, Brenkus, with 22 years in the business, estimates that 20 percent of the properties his offices handles are foreclosures or short sales, up from about 7 percent a year ago."

"The stumbling housing market has tentacles that could reach into every household in the Silver State."

"From thousands of lost jobs to widespread housing depreciation to a dip in the revenue flowing into state and county coffers, the fiscal fallout of a lagging housing sector is settling across Nevada's economy."

"'All sectors are feeling the effects of (greater delinquencies and dropping home prices),' said Brian Gordon, a principal in the economic research firm of Applied Analysis. 'It's impacting the willingness of consumers to spend on discretionary purchases ranging from automobiles to dining out to gaming, and everything in between.'"

"Clark County's construction sector shed more than 4,100 jobs between the first quarter of 2006 and the first quarter of 2007, according to the state's Department of Employment, Training & Rehabilitation."

"Pile on job contractions in real estate-related fields such as title insurance, mortgage banking and property appraisals, and the effect on consumer spending becomes more acute."

"More than a fifth of loans made in Nevada in 2006 were interest-only mortgages with payments that will rise in coming months and years, according to LoanPerformance. Another 17 percent of the loans made here last year were option-ARM mortgages."

"Falling home prices are also vaporizing assets: Every 1 percent drop in the median single-family home price costs Clark County homeowners $800 million in household wealth, said Jeremy Aguero, another principal at Applied Analysis. Toss in condominiums and town homes, and the impact approaches $1 billion, Aguero said."

"The median price of an existing home in Las Vegas was $270,000 in August, down 6.6 percent from $289,028 in August 2006, according to SalesTraq."

"Nevada's revenue from taxable sales has declined three months in a row, falling 2.6 percent in July when compared with July 2006, and 0.3 percent in June when compared with the same month in 2006. May's 3.6 percent slide in year-over-year revenue was the biggest drop since December 2001."

"Tyler Corder, (a) car dealer's chief financial officer, knows of a 'fair number' of consumers who plan to avoid auto purchases until they can sell their homes."

"'They'll say, 'My house has been sitting on the market for 90 days and I haven't had any offers on it,' Corder said. 'I know of a few people who bought second homes as speculative properties, and they're having difficulty renting out their homes or unloading them.'"