The Boston Globe reports from Massachusetts. "The section of the South Shore centered around Plymouth continues to experience a big drop-off in home sales and prices. Figures compiled by the Warren Group show that home sales throughout Plymouth County are down 10 percent so far this year, compared to the same period in 2006, while prices have fallen nearly 7 percent."

"Kimberly Allard-Moccia, former president of the Plymouth and South Shore Association of Realtors, said the soft market, while troubling to owners watching their home values fall, is actually a good thing for the overall market."

"'The region experienced unprecedented growth,' said Allard-Moccia in Braintree. 'It wasn't healthy from 2001 to 2005, when buyers were getting into homes that didn't meet their needs.'"

"'I tell sellers, 'This is not rocket science. You have to be realistic in your price,' said Peter Ruffini, president of the Plymouth and South Shore Association of Realtors. 'If you're not, you are setting yourself up for failure.'"

"Already, said Georgia Taft Pye, of the Duxbury firm Buyer Brokers of the South Shore, 'sellers are getting more realistic.' And that, she added, has really benefited buyers who 'really can pick and choose.'"

"Developers are going forward with several major projects now on the drawing boards. In neighboring Kingston, town planner Thomas Bott said he has not seen a big slowdown in development. 'I keep hearing people tell me it's awful out there. On the other hand, I just received an application for an 80-unit subdivision,' he said."

"Of all of the players in the South Shore and Plymouth real estate market, first-time buyers have the biggest advantage, brokers in the region say. 'With no house to sell, they are in the catbird seat,' said Pye. 'Everyone else has to sell their house first, and you are just waiting for the domino piece to set everything in motion.'"

"The foreclosure crisis (is) sweeping the north side of Lawrence, a crisis that is...shaking a local economy only beginning to recover from the real estate crash of the 1990s, when so many abandoned buildings burned that Lawrence became known as New England’s 'arson capital.'"

"'I thought nothing could be as bad as the ’90s,' said Mary Marra, executive director of a nonprofit developer of affordable housing. 'But I’m beginning to question that.'"

"Lawrence’s north side is one of many communities that were flooded in the late stages of the boom with subprime mortgages. Many succumbed to the lure of easy money, and bought homes beyond their modest incomes. Now, pick any street and chances are you’ll find homeowners in foreclosure, or desperately trying to sell before it’s too late."

"At Ebenezer Christian Church, Pastor Victor Jarvis said, church members approach him and whisper, 'I’m losing my house. Please pray for me so I’m able to sell it.'"

"Ana Luna is executive director of Arlington Community Trabajando, a north Lawrence neighborhood group. She shook her head as she recently drove past empty homes, slapped with tags that indicate lenders, unable to sell foreclosed properties, have sealed them up and shut off utilities. 'You think of all the people who need a place to live, and these buildings are just sitting there,' she said."

"Altagracia Portorreal remembers her next-door neighbor sobbing at the front door. After a year of working 12-hour days to pay her mortgage, the neighbor was giving up. She sent the keys to the bank, packed up, and abandoned the three-decker on Walnut Street."

"An estimated $1 billion in subprime mortgages flooded this one section of Lawrence from 2003 to 2006, according to First American LoanPerformance. The amount of subprime loans nearly quadrupled during the peak of the housing market in 2005, to an estimated $300 million from less than $80 million in 2002."

"'It was so exciting for the city to see people buying homes and investing, and neighborhoods becoming economically stable,' said Andrea Ryan, housing manager in Lawrence’s Community Development Department. 'Now we know it wasn’t all real.'"

"'For Sale' signs now sprout everywhere, often several to a street. Properties frequently are being sold for less than what the delinquent homeowner owes on the mortgage, a so-called short sale. Bob Ciccarelli, a real estate broker, said he has 19 listings in Lawrence. Eighteen are short sales. One of these properties, bought last year for more than $300,000, is now listed at $180,000."

"'Even decreasing the prices,' Ciccarelli said, 'they’re still not selling.'"

"Two years ago, Diane Jones bought her Danvers apartment when it was turned into a condominium. Today, Jones shakes her head when asked how those good intentions went awry. 'I trusted people,' she said, explaining that she didn't shop around for a mortgage, didn't read all of the mortgage documents, and didn't understand how bad things could get."

"But as her adjustable-rate mortgage approached reset in June, eventually boosting her monthly payments by more than $450 to nearly $2,000, she knew she was in trouble and might even lose her home."

"To pay for her $228,000 condo, Jones took two mortgages. The first, with an initial interest rate of 6.99 percent, charged interest only for the first two years. After 24 months, Jones not only started repaying principal but found her rate jumping to 9.99 percent. That resulted in a 43 percent increase in those monthly payments, which jumped to $1,520 from $1,063, an amount that exceeded what she had previously paid for both mortgages."

"Worse, a provision in the mortgage allows rate changes of up to one percentage point every six months to a maximum rate of 12.99 percent."

"The second loan is a fixed-rate 11.25 percent mortgage with monthly payments of $443 that comes due with a lump-sum payment in 2020."

"She sat down with Karen Busanovich, a certified financial planner in Woburn. Delays in the consolidation process, however, damaged her credit rating, which dropped to the 400s from the 600s. Scores under 600 are considered high risk."

"When she contacted various refinancing programs, Jones found her credit was no longer good enough to qualify. Her lender wasn't interested in negotiating because she had been managing to scrape together her monthly payments."

"A quick review of income and expenses showed that Jones was spending about $1,000 a month more than she was bringing in. Even if Jones trimmed her bare-bones budget by dumping the cable TV at $66 a month, she would still be in the red.'

"Jones was faced with unpleasant choices. Busanovich said she could get a second job, sell the condo, or get the lender to renegotiate. Or she could let the lender foreclose. 'At some point, you have to decide if you really want to be a homeowner,' Busanovich said."

Lancaster Online from Pennsylvania. "The summer collapse of the subprime lending market, which sent shock waves through the mortgage industry, is now affecting customers who want to purchase or build costlier homes."

"So-called 'jumbo' mortgages, defined as loans that exceed $417,000, traditionally have slightly higher interest rates than conventional mortgages, but now that gap is even bigger."

"Mark Pontz, a VP of Arlington Capital Mortgage in Lancaster, said about 25 percent of the loans there are of the jumbo variety. Typically, the interest rate for a 30-year jumbo loan is maybe a quarter of a percentage point higher than for a conventional loan of that length, Pontz said."

"But with the lending crisis this summer, 'that jumped, in some cases, to more than 1 percent,' he said."

"'Everybody freaked out' when the default rate escalated, and the jumbo mortgage market took a hit because those loans carry risk, too, Pontz said."

"One woman, who asked not to be identified, said she and her husband, who are building a home in Manheim Township, went to get a jumbo loan and were stunned at the 8-plus percent interest rate one lender offered. 'We were thinking 6-ish,' she said. 'It really made us pause.'"

The Long Island Business News from New York. "If the national economy stumbles into a recession it could very well start right here. Overstocked with overpriced homes and suffering equally from chronic brain drain and dwindling job creation, Long Island may become the poster child for all that has suddenly gone wrong with the U.S. economy."

"Housing stocks on the Island stand at 15 months, or 50 percent higher than the national average, with prices well off their 2006 peak. And while home prices set records in other parts of the country, as much as five times annual household income, in some places, few spots can match Long Island, where prices reached nine times annual household income in some parts of Nassau County."

"Most homebuyers can’t afford those prices. In fact, only about 10 percent of Nassau residents and 15 percent of Suffolk residents can afford to purchase the home they live in. 'Our housing has not only become unaffordable, but it has moved away from affordable by a very large amount,' said Pearl Kamer, chief economist at the Long Island Association."

"Thanks to the glut of home-equity loans and adjustable-rate mortgages, many Long Islanders can’t afford to sell their homes, either."

The Staten Island Advance from New York. "A recent spike in foreclosure filings on Staten Island is helping self-storage facilities here thrive like never before, according to those who manage them. Many of the Island's 11 self-storage facilities are near capacity."

"Thousands of units are filled with furniture, appliances and decorations owned by people whose mortgages are in default."

"The borough had 1,582 foreclosure filings from July 2006 through July of this year, according to a recently released state Senate report. And in August, there were 240 foreclosure filings in the borough, up 4 percent from 230 in July. Percentage-wise, the borough ranks second in foreclosures among the state's counties."

"'A lot of people are having a hard time,' said Jesus Sanchez, manager at Victory Self Storage in Travis, which is currently renting more than 90 percent of its 439 units. 'You've got people losing their jobs, they can't afford to pay their mortgage anymore. Once they get (forced from their homes), they don't want to lose their stuff.'"