Newsday reports from New York. "To give an idea of the state of the home builders' business these days, Ira Tane has switched from Model A to Model B. The big difference is that not only is Model B smaller, 2,000 square feet smaller, but the lower price means it's the one selling nowadays in Long Island's new-home market."

"'I would like to build that 5,000-square-foot house, but my business sense tells me that I am going to be better off building a smaller house for less money and leaving potential profit on the table just to be able to move forward. I can't retire on one house,' said Tane, founder of Benchmark Home Builders in Huntington Station."

"What's happened in the new-home construction industry parallels the recent slowdowns in the real estate and lending markets. To take advantage of the hot market, some builders invested in McMansions."

"'Building a five-bedroom home that's 5,000 square feet, you make a lot more money than a two-bedroom town house that's 1,200 square feet,' said Jim Morgo, Suffolk County commissioner for economic development and workforce housing."

"Until last year, Contempri Homes president Dominick Pedulla Jr. was chasing land for sale. Now, the Malverne company is getting calls from builders and real estate agents trying to dump land to him because they don't want to risk constructing a home no one will buy."

"'People are going to have to lose money to get out of these properties,' he predicted."

"East Meadow-based businessman Steve Klar's offer of a free, new Mercedes-Benz with a new house didn't work as well as he'd thought it would. So many potential buyers come back for repeat visits with the same news -- 'I'd buy it in a minute if I could just sell my house,' they'd tell him."

"'The sink is blocked,' Klar said, 'and we need Drano.'"

"It's not going to be easy riding the change in fortune. 'When people have been eating caviar for a long time,' Morgo said, 'it's hard for them to get used to beans.'"

The New York Times. "Although the wave of foreclosures is national in scope, no borough in New York has been harder hit than Queens. The Johnson sisters thought they were safe; their father paid off the house before he died in 1995. But hard times began five years later, when their mother, who had only limited health insurance, took out a loan on the house to help pay for her double-bypass surgery."

"She died the next year, and three years ago, in 2004, Lisa Johnson decided to refinance the mortgage. To this day, she does not understand exactly what happened, but somehow the refinanced mortgage ended up costing the family $2,700 a month."

"The sisters could not handle the payments. They defaulted on the mortgage last fall. 'Sometimes,' Lisa Johnson said ruefully, 'ignorance can get you in a lot of trouble.'"

The Boston Herald from Massachusetts. "Many Boston homeowners now facing foreclosure bought their properties less than a year ago, a Herald review found, raising questions as to the legitimacy of many of those sales. About 1,770 Boston residents were handed foreclosure notices by their lender over the past year."

"More than a third of those homeowners received notices just months after buying their homes, statistics compiled by local housing researcher John Anderson show."

"'One of the complaints that is increasingly prevalent is that so-called straw buyers engage in fraudulent transactions designed, in one form or another, to strip equity from a property,' said Amie Breton, a spokeswoman for Attorney General Martha Coakley."

"'These mortgages were bad even before the ink dried on the mortgage application,' Anderson said."

"Jennifer Stone is one of those buyers, claiming she was duped into taking out an expensive, high-interest mortgage she couldn’t afford to pay. She is now facing foreclosure after buying a $480,000 two-family home last spring in Dorchester."

"She decided to drop out of the Section 8 rental subsidy program and become a homeowner after attending a seminar at a Dorchester church. But Stone’s dream turned bitter the day of the closing, when she was told the $2,500-a-month payment she and her partner were promised, turned out instead to be close to $4,000."

"'It’s kind of like feeling you have lost everything,' Stone said."

The Herald Mail from Pennsylvania. "The land rush that began in 2002, when the number of residential lots approved nearly doubled to 2,116, slowed dramatically this year as the housing market cooled nationally."

"What customers want to buy also has shifted with the changing market. 'With the market conditions, we're trying to find a price point that will sell,' developer L. Ray Rachuba said. (He) talked about basic, starter houses as being a forgotten market."

"Rachuba cut lot prices in half in the Antietam Commons development in southern Franklin County's Washington Township. He also bought Mill Creek Acres in Chambersburg from Ryan Homes, dropped the asking price of each house $40,000 and offered closing assistance."

"Developers accustomed to getting 18 percent to 20 percent profit now are looking at 7 percent or 8 percent, Rachuba said."

"'I'm just as guilty as anyone for overpaying for land and trying to maximize (a return),' he said. 'We forgot, I guess, that pull for a 350- or 400-thousand-dollar house is only so strong.'"

The Asbury Park Press from New Jersey. "There are signs of life at Hawkins Ridge, a Kara Homes development in Jackson. (At) several other former Kara Homes developments, now owned by Maplewood, which bought Kara out of bankruptcy..the new company is injecting more than $90 million in operating and construction cash into the projects."

"Maplewood is willing to take into account the deposits that were given to Kara, essentially discounting a house, said Lakewood developer Glen Fishman, one of the investors of Maplewood. Maplewood does not have access to the deposits given to Kara, money that, unless it was bonded, is gone. In many cases, the deposits represented 10 percent of a home's purchase price."

"'We are giving these homeowners who endured a tremendous amount of pain in this bankruptcy basically a 10 percent discount on a house,' Fishman said."

"Janak Goyal said he is moving forward on his contract to buy a $1.3 million home at Buckley Estates in Marlboro. He had given a $210,000 deposit to Kara, an amount that Maplewood will assume, and had expected to move in in September 2005."

"'I have no choice,' Goyal said. 'If you don't sign, you are an unsecured creditor and you get 9 cents on the dollar.'"

"But some work performed by Kara, which he didn't like, won't be changed, he said. Plus, he still has to pay the same price for the house, even though he won't be able to sell his current home for the same price had he sold it in 2005, when the market was healthier, Goyal said."

"'I am losing anyway,' he said."

The Baltimore Sun from Maryland. "Samantha Stoney bought her house in Canton for a lot less than the sellers had originally hoped to get, but the good deal didn't end with the $243,000 price. They covered most of her closing costs, too, a $10,000 incentive."

"Originally listed at $300,000...the $10,000 toward closing costs 'really made a big difference,' she said. 'I didn't have to negotiate anything,' said Stoney. 'I probably wouldn't even have asked for quite that much.'"

"In effect, the sellers received $233,000. But that's not what got recorded in the home sales statistics."

"Amid a deepening housing slump, givebacks have become increasingly common, even expected as a matter of course here and nationwide, economists and real estate agents say. And because they're unmeasured, they mask an erosion in housing prices."

"These discounts are so widespread that some economists think that prices in the Baltimore area - up about 2 percent so far this year, according to official numbers - have really declined."

"'They've probably been falling since late last year or early this year,' said economist Mark Zandi."

"Local real estate agents say homeowner givebacks are typically worth 2 percent to 5 percent of the home's selling price, significant cash. Five percent of a $400,000 home is $20,000. Some homebuilders, meanwhile, are advertising incentives of up to $100,000."

"And it doesn't look as if sellers will be able to stop soon. In the Baltimore metro area, the number of unsold homes on the multiple listing service hit its highest level on record last month, just over 20,000."

"Sales were down 17 percent from last August - and nearly 40 percent from August 2005, the end of the housing boom."

"Builders are offering incentives, said Metrostudy's Kenneth Wenhold, to compete against all the older homes for sale and to grab a bigger piece of the new-home market while the grabbing's good. 'What they're basically doing is slitting the other builders' throats in an attempt to capture market share,' Wenhold said."

"At Ovation, a luxury condo project in Columbia, Ryland is covering a year's worth of pricey condo fees. To bring attention to its Church Hill Hunt community in Queen Anne's County, it promises buyers help in selling their current homes."

"'The people making money in real estate today are not the ones selling it; they're the ones buying it,' said Earl Robinson, VP of sales and marketing with Ryland, who estimated the value of the company's incentives at 'upwards of $100,000' in some communities."