Inside Bay Area reports from California. "Quakes from the housing market's downturn continued to shake San Mateo County in November, as home sales sagged nearly 30 percent, a new report revealed Thursday. The growing inventory of unsold homes on the Peninsula pushed home sales down to their poorest November in at least 10 years, real estate agents said."

"Meanwhile, the median price of a single-family home countywide remained on a roller-coaster ride, falling more than $100,000 to $922,500 in November compared to October. Still, the median price was up 5 percent from November 2006."

"'Those Google kids are skewing it, buying $3 million and $4 million properties,' said Geoffrey Craighead, president of the San Mateo County Association of Realtors."

"Foreclosures tripled in the third quarter in San Mateo County compared to the same period in 2006."

"Some of the county's lower-income cities were hit hardest by median price declines between November and November 2006. They included East Palo Alto, which fell 32 percent to $412,500; South San Francisco, which slipped 14 percent to $650,500; San Bruno, which slid 16 percent to $632,450; and Daly City, which fell 11 percent to $655,000."

The Daily Pilot. "Chapman University President James Doti, in a slide presentation before about 2,000 people, said the United States economy was clearly headed for a slump next year and that the figures for the current year were more discouraging than the university predicted last December."

"Doti, like the UCI panelists, devoted much of his talk to the housing market. Reckless borrowing by homeowners, he said, had contributed partly to a massive drop in home equity over the last year."

"'People are kind of borrowed to the hilt,' Doti said."

The New York Times. "When Jirina Koy heard that President Bush was announcing a freeze yesterday on mortgage interest rates, the Stockton, Calif., homeowner felt a flicker of hope."

"It was quickly extinguished. After calling a nonprofit housing assistance center, Ms. Koy learned that her mortgage, for all the trouble it was causing her, was not likely to be one of those qualifying for relief. Mortgage experts say there will be many borrowers like Ms. Koy."

"She has a so-called option loan, which gives her the choice of how much to pay every month. Heavy in debt, she usually chooses the minimum. 'I got all these calls from brokers all the time — ‘You could pay off debt, pay off the car loan, make extra money every month, blah blah,' she said. She took out $60,000."

"Jason Bosch, president of Home Center Realty in California’s hard-hit Riverside County, was pessimistic. 'We were selling $300,000 homes to people who could only afford $175,000 homes,' he said. 'Even if you freeze their payments, they still can’t handle it.'"

The Merced Sun Star. "It's the time of year for glad tidings, and that's what the latest figures on Merced's housing affordability show. But when it comes to other real estate numbers, the data lean more toward lumps of coal."

"Which city led the country in dropping home values? You guessed it: Merced. Prices here slid 13 percent from the third quarter of 2006 to the third quarter of 2007. Prices in Merced dropped 5.37 percent from the second to third quarter."

"In October, the period for which monthly numbers are available, Merced County's median home price was at $250,000, down 26.7 percent from the October 2006 price of $341,000, according to DataQuick."

"Scott Oliver, president of the Merced County Association of Realtors, cast the plummeting prices in a favorable light. With prices moving back to where they were before the boom of 2004 and 2005, Merced is returning to a 'normal market,' said Oliver."

"Lately he's seen buyers making offers about $20,000 below the asking price, whereas last year buyers were putting in bids up to $75,000 below what sellers were asking, said Oliver."

"Don Gray, president of Merced chapter of the Central California Building Industry Association, says builders are cautiously optimistic that their business will pick up in 2009. But with local homes now selling for $100 per square foot, which Gray calls a 'phenomenal price,' he's curious about why more folks aren't jumping back into the market."

"'We're surprised that there's not more interest right now and there's not more people buying homes,' said Gray."

"As recently as 1999, the percentage of affordable homes on the market in Merced was at 67.4 percent. Since then, the figure has dropped steadily, reaching an all-time low in 2005, at the height of the housing boom. Back then, Merced ranked as the least-affordable smaller city in the country. Today, Merced is ninth on that list."

The Bakersfield Californian. "Kern properties foreclosed last month totaled 412, by far the most in a single month since the county began tracking filings in 1995, trustee's deeds filed with the Kern County Recorder's office indicate."

"Likewise, 985 default notices were sent to property owners in November, a number that also sets a new monthly record."

"The filings were up from October, when 372 foreclosures and 945 defaults set new records at the time. Year-over-year foreclosures more than quadrupled and defaults more than doubled."

The Voice of San Diego. "In July 2005, a one-bedroom, one-bathroom condo in the Park Boulevard West building in downtown San Diego sold for $417,500. The unit, No. 1203, was repossessed when the owner failed to make mortgage payments. It sold again last month, this time for $268,000 -- a 35 percent price drop."

"The game of real estate pricing is built on a foundation of comparable sales, known as 'comps.' So when those comps slide, so do prices in general. And when there's not much, except height and sometimes a view, to distinguish one one-bedroom, one-bath unit from another in the same building, foreclosures are expected to affect prices especially hard in some buildings in downtown San Diego."

"Of the 46 units that closed escrow between Nov. 1 and Dec. 4, nearly one-quarter were either bank-owned or short sales."

"'They are the ultra-motivated seller,' said Peter Dennehy, VP with the Sullivan Group Realty Advisors. 'As more and more foreclosures have started to come on the market -- when you have 10 units (in foreclosure) in a building instead of one, you're more than likely to cut your prices lower.'"

"'There are very few buildings that have none,' said Jim Abbott, a longtime downtown Realtor. 'There's even one in Meridian, which is unheard of.'"

"In the first 10 months of 2007, 449 different houses or condos in the downtown San Diego ZIP code, 92101, were in one of the three stages of foreclosure, according to RealtyTrac. The neighborhood's rate of foreclosure was one for every 23 homes."

"Of the 46 units in all of 92101 that closed escrow between Nov. 1 and Dec. 4, 11 were either bank-owned or short sales, where homeowners negotiate with the lender to sell their home for less than they owe on the mortgage. That's nearly one-quarter of the sales in the month sold in such circumstances."

"Foreclosure isn't the most significant source of downward pressure on prices in downtown, Dennehy said. 'Prices have already been coming down,' he said. 'Now it's just another shoe dropping. Some buildings have had many whammies. Pretty much every building has something going on.'"

"Savvy buyers and their agents look at the low end, usually foreclosures, and make offers below the most recent sale. And even if there were a buyer willing to pay top dollar for a unit, lenders won't issue a loan for more than a unit's appraised value, which slips with every lowered price."

"'It's where the market is going,' said Brenda Crann, a real estate agent who focuses on selling units for lenders. She said she and her co-workers expect to be 'flooded with more bank-owned properties' in January.'"

"As foreclosures become the norm, constituting nearly a quarter of the sales in a month like in downtown last month, prices will fall further in some places, Dennehy said."

"'People don't look at the market. They look at the individual building,' he said. 'You're not going to pay more than you have to. The value of something is what somebody's willing to pay for it. That becomes the new price.'"

The Sacramento Bee. "A new town house project in West Sacramento is biting the dust. After selling just 11 of its 34 three-story units, according to Hanley Wood, owners of Harriet Lane are putting it on the auction block."

"The project had a claim to fame and a 2005 mention in the New York Times as one of the nation's first factory-built town house projects. Sales then started at $339,000 to $359,000. Opening bids now: $169,000 and $179,000."