The Columbian reports from Washington. "If you think you're seeing more 'For Sale' signs around Clark County, you're right. The inventory of homes for sale here is the highest in at least five years, according to new figures. A year of sluggish sales contributed to a 12-month inventory of new and pre-owned homes on the market in September, the biggest backlog since records started being kept in 2002, according to RMLS."

"'Buyers are in no hurry,' said Mike Lamb, an associate broker with 'in Vancouver. 'Their expectation is that prices will go down.'"

"Sellers are waiting it out as well, and some are 'holding onto a false sense of appreciation that may not be justified in this market,' said Kathy Rylander, also an associate broker."

"New homes account for much of the excess inventory, a situation that has caused a dramatic slowdown in new home building. 'Builders are having a rational reaction to the marketplace,' Lamb said. 'As things slow down, they're building fewer homes. We're going to have to work the inventory down.'"

"Home construction represents a $350 million piece of the local economy and supports several thousand jobs in construction and related services."

"The sector barely kept up with demand two years ago. 'Now, we're fighting for every sale out there,' said Matt Lewis, acquisition and planning manager for Vancouver-based Pacific Lifestyle Homes."

The News Tribune from Washington. "If there is any doubt that today’s Pierce County housing market is one fit for buyers, check out these offers: A $5,000 furniture gift card on North Tacoma condominiums selling for $249,900 to $342,900. A $15,000 bonus in a gated community of houses in Parkland. A 2005 Honda Civic with a three-bedroom West Tacoma house priced at $549,500. A $15,000 shopping spree at Posh Home with a two-bedroom downtown Tacoma condo."

"Such an atmosphere differs considerably from just two or three years ago, when buyers competed with multiple offers, were outbid, and sellers declined to make concessions they now readily make."

"In September, 2,107 new Pierce County homes were for sale, a 26 percent increase over the same month a year ago, according to Northwest MLS."

"New-home builders are pushing buyer incentives to stand out from the subdivision crowd, said Tom McCollum, a real estate agent selling homes at Stoney Ridge, a 39-house development in Frederickson. Buyers there are eligible for a $20,000 incentive."

"'The market has obviously changed, and there’s a lot of standing inventory,' McCollum said."

"Parkland subdivision AutumnWood opened for sale last year and added a $15,000 buyer bonus in August. 'As the market has turned we have to come up with new and better ideas to motivate the buyer,' said agent John L. Scott."

"Builders and developers typically are reluctant to lower prices in favor of incentives. A reduction in price comes directly off the bottom line, whereas an upgrade, such as crown molding or an entertainment system, could cost the builder less, said Glenn Crellin, at Washington State University."

"'It makes it look like they’re contributing more than might really be the case,' he said. 'It’s a marketing ploy.'"

"Plus, lowering the price on one new house in a subdivision could impact the prices on subsequent sales and the value of nearby homes. 'If they’re offering homes for sale for less than previous purchasers paid, they get a lot of negative reaction from folks who recently moved into their neighborhood,' Crellin said."

"David Groff listed his West Tacoma house more than a month ago and added a 2005 Honda Accord as a bonus a few weeks later. His 3,000-square-foot home, with a view, is priced at $549,500."

"'The house has a lot to offer, but there are obviously a lot of houses for sale,' he said. 'The car idea was just some kind of tangible thing you can see and feel more than a cash bonus.'"

"Bob Mortimer added a 1954 Cadillac to the sale of his Gig Harbor home after several months of no buyers. His four-bedroom house – now at $849,000, down from $895,000 – has been for sale for nearly a year."

"'I thought it might be a fun thing to do to offer it with the house instead of lowering the price again,' Mortimer said."

"Bill Riley, an owner of Gateway Real Estate, said he raised the price of a house in Puyallup by $15,000 recently and added a Harley-Davidson motorcycle to the listing. 'Sometimes things like that capture a person’s attention. It didn’t work. We did it for three weeks. We dropped the price back down,' he said."

"Other real estate agents tell their clients to avoid incentives in favor of discounting the price on a listing. Buyers, said Windermere agent Mike Tinder, want a good price. Plus, today’s home shoppers respond to price reductions, because they can use money saved from lower house payments to pay off credit card debt, he said."

"'I think giving away a car is a bit silly. I think cash is king,' he said."

The Bellingham Herald from Washington. "Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said much of Western Washington has returned to a situation where neither buyer nor seller has the upper hand, which may feel strange to some after five years of a hot real estate market."

"'The level of activity is down a bit across the state and supply is up, but prices are still holding up reasonably well,' Crellin said. 'It’s really turned into a balanced market, or slightly into a buyers’ market.'"

"'My guess is that for the first time in at least five years, home prices will end up about the same as the previous year,' said said Gragg Miller of Coldwell Banker Miller-Arnason.. 'It shouldn’t come as a surprise. The market had been appreciating too quickly and a break was needed.'"

"Through three quarters of this year, the number of homes sold for less than $350,000 is down sharply. At the same time, sales of homes more than $500,000 are up sharply, already surpassing 2006 levels."

"There are several explanations for the drop in sales for first-time homebuyers. 'I think of it as the great psych-out factor that’s taking place for buyers (in that price range),' said real estate agent Ken Gustafson. 'There is a wait-and-see attitude, where some people are holding back, waiting to see what happens next. It’s interesting because there are many more choices and good loan products out there.'"

"'Right now some are convinced that what’s happening nationally is happening here, but we don’t see those signs. Once they realize that, demand will increase,' Crellin said."

"'The increased interest from Canadians has really taken place in the last few weeks when their dollar reached parity,' agent Mike Kent said. 'Vancouver (B.C.) area home prices are so high right now that Whatcom County looks like a bargain in comparison.'"

"Earlier this month Janna Denney closed on a two-bedroom condominium on Northwest Drive. It was her first real estate purchase. Even though Denney is 22, she was confident about being able to qualify for a loan because she has been working for five years. She was able to get prequalified last spring."

"'I felt pretty lucky, because I was qualified before all the news about tightening credit happened,' Denney said. When she found the unit she wanted, Denney made an offer that was immediately accepted. She’s moved in now and happy with her unit, which was converted from an apartment."

"'This place has all-new appliances and they did a great job renovating it,' said Denney, who paid less than $200,000. 'On the inside it feels like a brand new condo unit, but with a usedunit price.'"

The Oregonian. "Clark County's housing market showed signs in September of slowing more than the rest of the Portland area, according to data released Wednesday."

"The county had a greater inventory, needed more days to sell and had a steeper drop in closed sales compared with the area that includes Clackamas, Columbia, Multnomah, Washington and Yamhill counties."

"At the rate homes were selling in September, it would take about 12 months to sell all of them. A year earlier, inventory was at 6.4 months. In September 2005, it was 2.6 months."

"Closed sales dropped nearly 42 percent and pending sales fell about 30 percent."

The Bend Bulletin from Oregon. "Mortgage defaults have continued to rise through the third quarter in Deschutes County as an increasing number of homeowners struggle to make their payments, county records indicate."

"'There is turmoil, some turmoil,' as Ball Janik LLP bankruptcy and foreclosure attorney Jeff Gardner put it for a crowd of 45 local bankers at a seminar in Bend on Thursday."

"Ball Janick’s attorneys are representing banking clients in foreclosure cases simultaneously in Washington state, Idaho and Oregon this summer, Gardner said, the first time he’s seen that in 10 years of practice. The cases have all involved residential builders working throughout the full range of the housing market — condominiums, subdivisions and high-end homes."

"Gardner said he smells nothing in the air to indicate that the banking climate is about to melt down to anything like the high-interest crisis of the early 1980s, the agricultural collapse of the mid-1980s, or the real estate slowdown of the late 1980s and early 1990s."

"The sky is not falling,' Gardner said. 'Banks are not necessarily going out of business.'"

"Despite the housing downturn, said Tom Bourdage, West Coast Bank’s VP for commercial loans said the potential effect of loan failures of all types on the local banking industry won’t be as dire as some think."

"'A lot of it is perception,' Bourdage said. 'It’s not as bad as it seems.'"

"Bend-based Bank of the Cascades reported that its nonperforming loans rose to around $21 million in the quarter, or about 0.89 percent of total assets, largely due to trouble among some Boise, Idaho, housing projects."

"The Central Oregon MLS listed about 35 homes this week as 'distressed,' said broker Ruben Garmyn. The bulk of them are banks trying for a 'short sale.'"

"Most of the homes were owned by investors who bought too high and have walked away, Garmyn said. He expects it to rise higher through the winter as failed investors and contractors give up."

"'There’s going to be so many good deals on the market, it’s just incredible,' Garmyn said. 'You need to buy them now when everybody is sitting on the fence and doesn’t want to buy ’em.'"

Business Week reports on Oregon. "In the late 1990s, Bend became one of those sleepy mountain towns, like Bozeman, Mont., and Coeur d'Alene, Idaho, that started popping up on 'Best Places to Retire' lists. Construction boomed, the population doubled (to 75,000)—and so did housing prices."

"But the influx of Californians, which contributed to the real estate boom, has slowed to a trickle. Just 106 single-family homes were sold in September—two-thirds fewer than in the same month in 2005. The town now has a 15-month inventory of homes for sale. 'There's a slump in the market, no question,' says appraiser Michael Caba."

"The best deals are in high-end homes that developers built on speculation. Bill Berger, who runs the local office of Hasson Company Realtors, has watched the asking price of one new 2,700-square-foot house sink from $579,000 in February to $439,000 now."

"'Prices got too high,' he says. 'Now they are coming back to reality.'"