The Chicago Tribune reports from Illinois. "As soon as Trump International Hotel & Tower, the city's first new-construction condo-hotel, gets a city permit to begin its phased opening, developer Donald Trump will find out for sure whether Midwesterners and others are willing to fork over megabucks to buy a pad in his luxury inn. The flamboyant salesman is aiming to ink sales at a time when the residential real estate market is plummeting and the once-hot condo-hotel trend continues to chill."

"The project's condo-hotel room sales took off smartly three years ago but have flattened more recently. 'The market in Chicago is dead as a doornail right now, as is the rest of the country, other than Manhattan or Palm Beach, Fla.,' Trump said, blaming the nationwide credit crunch. 'But that will change...and if credit becomes available again, that will help.'"

"There has been some dramatic cratering in the condo-hotel market. 'I know of one [condo-hotel] project in South Florida that...was supposed to have been two-thirds sold out but when it opened in July with 158 units, they had seven closings,' said Karen Johnson, of Jones Lang LaSalle Hotels."

"Individuals buy these units, and place them in a rental pool when they are not using them, to generate income. A Jones Lang LaSalle study found that generally these are not income-producing investments, Johnson said, adding that the potential payoff is all tied to appreciation."

"'So if we're entering a period where values are going to be flat, or God forbid, declining ... it's a whole 'nother story,' she said."

"'You need to approach it with second-home economics in mind, that 'I'll write a lot of checks, I'll hold it until I'm empty-nesting, and then I'll sell it,' she said."

"Mark Eble, VP/Midwest for a hospitality advisory firm, 'it still remains to be seen whether investors would've been better off buying T-bills or mutual funds.'"

The Business Weekly from Indiana. "Potential owners of Harrison Square condominiums were expected to begin reserving spots at prices that were in line with a failed downtown condo project. Depending on the floorplan, asking prices will range from the $150,000s to the low $300,000s, said Mike Brita of the firm handling sales at The Harrison."

"Brita said the prices more or less were set by Atlanta-based developer Barry Real Estate Cos. and likely are fixed. They were based on what was needed to recoup construction and other costs, he said."

"Those involved with the project are trying not to scare buyers away with the prices, Brita said. 'This is unique,' he said. 'It’s something we struggled with because there was nothing to compare it to.'"

"'I don’t think (The Harrison’s prices are) way off,' said commercial property owner Bill Bean. 'There is some interest out there. I just don’t know how deep the interest is.'"

The Journal Sentinel from Wisconsin. "For commercial real estate developers who are seeking financing for their projects, this holiday season doesn't look a lot like Christmas. Developers of projects costing $100 million and higher are finding it very difficult to obtain loans, said Marty Collins, CEO at Dallas-based Gatehouse Capital Corp., which is planning a 20-story project in downtown Milwaukee's Park East area."

"'That market is closed,' Collins said."

"Gatehouse and its local partner, Ruvin Development Inc. are pursuing plans to build a 180-room Kimpton Palomar Hotel, along with offices, 70 condominiums, retail space and a parking structure. But the project is among several proposed Milwaukee-area developments that may need to jump through higher hoops brandished by lenders."

"Chicago-area developer Warren Barr, say the media has overstated the subprime problems, which has made it more difficult to attract condo buyers."

"'It makes a lot of buyers sit on the sidelines,' Barr said."

The Burnett County Sentinel from Wisconsin. "The number of foreclosures filed with the Burnett County Clerk of Court's office is already at 91 for the year, with four weeks left to go. That number is up from 75 and 77 for 2006 and 2005 respectively, is up from 51 in 2004 and marks a huge jump from the 38 filed in 2002."

"A glance at the legal section of this or any other newspaper and the reader would see several foreclosure notices posted each week. And it's not just Burnett County."

"'I heard the St. Croix County Clerk of Courts office had to hire a temp just to handle all the foreclosures,' Burnett County Clerk of Court Trudy Schmidt said."

"'I've been in the mortgage business for three and a half years and this is the worst I've seen it,' Judd Danielson of Freedom Foreclosure Prevention Services in Luck said of the foreclosure market. 'I have brokers calling me who have 35 to 40 years in the business and they are saying the same thing.'"

"'The ARM starts at five or six percent, but then after three to five years the rate adjusts upward to 10 or 11 percent, and I've seen it as high as 18 percent, but the borrowers are not adjusting their income levels,' Danielson explained. 'A lot of these people bit off more than they could chew.'"

The Pioneer Press from Minnesota. "Homer Tompkins' development company, Contractor Property Developers Co., has entered into a voluntary mortgage foreclosure agreement with MI Bank in Minneapolis related to 50 developed single-family lots and 129 undeveloped lots at a high-end development called Inspiration, Tompkins said."

"The company owes the bank more than $9 million on the original loan of $14.65 million, according to documents filed this month with the Washington County recorder's office. The lots are headed for a sheriff's foreclosure auction in Stillwater next month, Tompkins said."

"City officials say 28 custom homes, 15 of which are occupied, have been built at the upscale 242-acre project that opened just as the housing market began its downward slide. Home prices ranged from the upper $300,000s to $800,000."

"Tompkins blamed the slow sales on bad timing. 'We're in the greatest housing slump since the Great Depression,' he said. 'Consumers don't have confidence in buying houses in today's market. There are hundreds of these (voluntary foreclosure) agreements in process. I'm just one of them.'"

"Every time Mark Gergen heard it, he wanted to scream. This time, it came from a couple who looked like perfect customers, ready to buy a new $725,000 home. They had the money. They loved the house. It was all so simple, but then...'Is it the right time? We are just now, nervously, getting off the fence,' the woman said. 'It's the news. It's all so unstable.'"

"They left. Gergen sighed. He felt powerless against the onslaught of headlines and bad news that frightened customers away. 'It's that consumer confidence thing,' he said, standing in an empty kitchen."

"As a hotshot real estate salesman, he was called in to help revive a planned $1.2 billion development, the Spirit of Brandtjen Farms in Lakeville."

"The 15-year project, which broke ground in 2004, was supposed to build 2,100 homes. But developers watched in horror last year as the entire operation ground to a halt, with only a handful of homes purchased."

"In 2004, no one worried about consumer confidence. The market was booming, and home sellers laughed in disbelief as buyers rushed to bid against each other, pushing prices ever higher."

"Then the market collapsed. It had nothing to do with the usual villains - high interest rates, lost jobs or falling wages. This collapse was based on psychology."

"Tradition called on Gergen to help sell homes. When he saw the Spirit site, the project's biggest flaw jumped out at him. It was the homes themselves. In the go-go years, three high-end custom builders had erected model homes as a gateway to the project. They were unique farm-inspired mansions. They cost up to $925,000."

"They were impressive. But for homebuyers, there might as well have been a flashing sign reading 'for millionaires only.'"

"It almost was impossible to show buyers a $900,000 home, then sell them a $500,000 home they could afford, said project manager Rob Wachholz. 'There is a limited opportunity to sell $450,000-to-$500,000 homes. And when you get to $800,000 to $900,000, you are in some pretty rarified air,' Wachholz said."

"Gergen toured the models with potential customers. Afterward, he asked which one they'd choose, if money were no object. The favorite - none of the above. Instead, they picked a town house."

"'I said: 'You're kidding. You just went through 10 houses for $700,000 to $950,000, and you picked this? Why?' said Gergen. The answers: Higher ceilings and more 'wow' appeal. 'That told me a lot,' Gergen said."

"Once Tradition realized its mistake, the backpedaling was furious. The entire company refocused on one goal: Building less expensive houses that would still fit the luxury theme of the project. It wouldn't be easy. The lots alone cost $139,000 to $257,000."

"'Who wants to buy a $400,000 small house?' asked Don Nelson, of American Classic Homes, one of the Spirit homebuilders."

"'I just can't build a $500,000 home,' sighed Cudd saleswoman Kim Holmberg at another meeting. 'Now, $2 million homes' - she looked dreamily into the distance - 'I can build those all-l-l-l-l day.'"

"The houses tweaked, the prices reduced, Tradition turned to the sales force itself. After sitting alone in model homes for months, who could blame them for being depressed? Yet the veterans knew no one would buy a house from a sulking salesperson."

"At one meeting at Spirit's clubhouse-barn, Charles Cudd salesman Tom Griffith addressed the group: 'We have to be incredibly positive, regardless of how negative things are.' In case anyone missed his point, he added: 'Positive, positive, positive!'"

"As the Parade of Homes continued, Gergen and Gergen associate Julie VanDerostyne proved adept at getting names and phone numbers from potential customers. VanDerostyne asked one woman for her e-mail address. 'Um, I dunno,' said the woman."

"'We have social events,' VanDerostyne said. 'Um, I dunno.'"

"'With free wine.' Pause. 'OK,' the woman said."