The News Tribune reports from Washington. "Pierce County home prices dropped in September for the first time in years, as sales activity continued to ramp down. Sales activity also lagged, with 40.5 percent fewer homes sold in September compared to the same month last year. Puyallup saw one of the steepest decline in sales, a 50.5 percent drop, along with a median sales price decrease of 4.2 percent."

"The price drop and sales slowdown accompany a growing array of incentives for buyers and their agents, including cars, discounted closing costs and furniture shopping sprees."

"In the six months Chris Wlodarczyk shopped for his first home, he watched the market become one he says strongly favors buyers. Friday afternoon, he counted off the upgrades he landed on the Orting home he’s buying for $262,000: an outdoor hot tub, a fully landscaped yard, a Jacuzzi bathtub and all of his closing costs paid."

"His advice for house hunters? 'Be choosy,' said Wlodarczyk. 'If you look hard enough, you’ll find a house that’s worth more than you’ll pay for it.'"

"Shirley Patterson took her North End Tacoma condominium off the market this week after listing it in June. 'You can tell it’s a buyer’s market; they’re very choosy when they come in,' she said."

"Patterson priced the 1,000-square-foot unit, with a view of Commencement Bay, at $309,000 and later discounted it by $10,000. 'I’m somewhat discouraged, but I think I can compete when I do the upgrades. I have the view and they don’t,' she said, referring to nearby condo projects."

The Herald Net from Washington. "Snohomish County's housing boom is over. Builders are laying off workers, houses are staying on the market longer, and the overall number of permit applications has dropped by hundreds compared to last year."

"'Nearly every developer has or is contemplating layoffs, and it's because of the slowdown in the market,' said Mike Pattison of the Master Builders Association of King and Snohomish Counties."

"That's after what many call the largest building boom the county has ever seen, marked by bidding wars and rabid pre-sales of homes. During that boom, a 5,000-square-foot vacant lot went for as high as $247,000."

"'The housing peak is over,' said Todd Britsch, president of Bothell-based New Home Trends, which tracks new construction. 'These type of frenzies come around every 20 years.'"

"'What we're seeing is the natural cycle of the real estate markets,' said Nathan Gorton, executive officer of the Snohomish County-Camano Association of Realtors. 'We had the top three years ever in a row as far as sales go. All of a sudden sales are cooling off. Instead, we'll have like the eighth-best year.'"

"Some builders are stuck with some of the leftover inventory because the number of buyers isn't as high as it had been, Gorton said. Consequently, builders are 'taking a deep breath,' Gorton said."

"Fewer vacant building lots are being bought, plummeting from 889 in the first three months of the year to 145 sales in July, August and September, said Toby Barnett of Barnett Associates Real Estate in Marysville."

"Barclays is listing nearly 1,400 lots worth $74.3 million in Snohomish County, according to the company's Web site."

The Register Guard from Oregon. "In the first six months of last year, 334 Lane County homes were being foreclosed on. Fast forward to this year, when that number almost doubled, to 584, in the same time period, according to RealtyTrac."

"Foreclosures in Lane County increased 92.3 percent in July and August compared with a year ago. Statewide, they rose 52 percent in the same time, according to RealtyTrac."

"Berri Leslie, manager of the mortgage lending section of the state Division of Finance & Corporate Securities, suggests that Lane County's biggest problem may be what most would consider a strength, high home values."

"The Eugene-Springfield area's rapid rise in real estate prices from 2002 through 2006 may have forced some buyers into the subprime market, she says. 'If it costs more to get into a home, folks might have to rely on nontraditional (mortgage) products to afford it,' Leslie says. 'So there can be a lot more risks.'"

"Todd Williams, legislative committee chairman for the Oregon Association of Mortgage Professionals, says it makes sense that Lane County may have priced itself into its current situation."

"'It has become what we call an unaffordable market,' Williams says, explaining that the area's median income is not sufficient to afford a median-priced home."

"'When you have that situation and you have people who want to become homeowners, for the mortgage industry, it becomes incumbent on them to come up with some sort of products,' Williams says."

"Ren Nelson, a mortgage broker (in) Eugene, says she's working with a client who has owned her home for 18 months. The home's value has increased and the woman now has about 35 percent equity in her property."

"But Nelson's client financed the home a few years ago through another broker, taking a subprime, adjustable-rate mortgage. Because of a series of financial setbacks...the woman has been late on six of her monthly payments."

"Now, despite her high equity, the damage to her credit makes it unlikely she'll be able to refinance to avoid the interest rate increases on her adjustable loan. 'The lenders are looking at her and seeing too much risk and exposure,' Nelson says. 'They're saying, 'We don't want to do the loan,' but she's got all this equity. So the rules of loans and underwriting have completely changed.'"

"'To be real candid about this gal ... my vision is that she's going to have to sell the house, because I'm not going to be able to refinance her,' Nelson said."

"Robert Broten, a loan officer at Pacific Home Funding in Eugene, says that when local home prices were increasing 20 percent or more per year, many homebuyers who couldn't come up with down payments were able to get loans for the full value of their homes, or more."

"Others took loans that had low payments in the beginning but then rocketed upward, or had a big balloon payment."

"'I think a lot of them went into it thinking, 'These (adjustable rates and other unfavorable loan terms) are temporary issues, and I'm going to fix them later,' Broten says. 'I think it got to a point where people...just didn't have the financial plan, or the understanding of their financial situation, to afford a home.'"

The mail Tribune from Oregon. "Well-positioned real estate observers say the impact of failed subprime mortgage loans and the residual effects will have to work their way through the pipeline before the Jackson County market regains its footing."

"For the three-month period of July through September 2006, there were 106 default notices sent out. For the same three months this year, there were 212, including 77 in September, said Lacey King, who tracks Jackson County defaults."

"'Most of them were in the $150,000 to $175,000 range. That shows there were a lot of people in the lower end of the scale getting loans when they shouldn't have been lent the money. Looking at the real market value, I don't think they put a lot down,' King said."

"The picture becomes clearer when King rattles off interest rates on the failed loans: 8.75 percent, 9.85 percent, 9.9 percent and 14 percent."

"'That's a clear indicator of a subprime loan when you see rates like that,' said Mike Sickels, CEO of People's Bank of Commerce in Medford."

"The woes of homeowners have created a growth industry for people like Brian Hilden. Hilden runs a company that helps distressed sellers unload their homes before they're lost to foreclosure."

"'I sit with a lot of people who have really bad loans, many of them first-time home buyers,' Hilden said. 'A lot of brokers got pushy in the height of bubble. I think they were guilty of downplaying the seriousness of variable rates. There were people who got caught up in the frenzy of buying investment property, and about half of the people I'm dealing with were investors.'"

"Although Jackson County sales activity declined the second half of 2005, prices continued rising and inched up for several months before drifting downward. The median sales price for single-family residences in the county's urban areas was $288,900 in January 2006. By last month, the median sales price declined 12.6 percent to $252,500."

"'There's always a lag time,' said Roy Wright, a Medford appraiser. 'Volume will drop for a year or year and a half, and then the market will react. If you look at where the prices were in September 2005, they were 23 percent above September 2004 even though the sales rate was dropping.'"

"The inventory of residences available, from condos to rural properties, is near 3,000. In-migration by equity-rich homeowners from other states may be slowing as the markets they move from go ice cold."

"Just as builders barged past the market's stop signs, some mortgage brokers feeding the Wall Street investor frenzy continued to loan money even when it made little sense."

"'Definitely some people should stand up and say I am a part of what brought this on,' said Colin Mullane, a member of the Statistics Committee of the Rogue Valley Association of Realtors. 'As responsible adults when we hear rates that are too good to be true we should question it. If you go to Washington Mutual or People's Bank and they quote you one rate and then you go to Fly-by-Night dot-com and they say they can save you $400 a month, you're not going to be a responsible adult if you're not questioning that.'"

"According to figures compiled by LandAmerica Lawyers Title, nearly a third of the county's 40,679 single-family residences are not occupied by their owners, meaning that if investors bought near the top of the market and are wanting their money out, they're likely going to take a hit."

"Adjustable-rate mortgages taken on by many investors and first-time buyers during the latter stages of the boom will kick up to higher market rates. It may force more foreclosures in the short-term, Mullane admits, but it will be good for the overall market."

"'That needs to be flushed from the marketplace,' he said."