The Baltimore Sun reports from Maryland. "The Station North Townhomes had no shortage of pre-construction buyers, lured by the promise of luxury living near Penn Station in Baltimore's emerging arts district. Prices in 2005 reflected a red-hot market, rising tens of thousands of dollars with each batch of new contracts. Now, amid a housing slump that has builders slashing prices and offering giveaways, Station North's developer is looking for tenants."

"'The sales just pretty much stopped,' said James D. Campbell, a principal with Somerset Development Co."

"Somerset hopes to rent the 14 unsold homes in the 32-unit development, offering a lease-to-buy program or straight rentals, with monthly payments ranging from $1,600 to $2,400."

"Somerset's sale prices, which started at a range of $280,000 to $300,000 in summer 2005 and climbed in a matter of months to the high $400,000s for the largest corner units, have already been reduced. They now range from $300,000 to $450,000. Campbell said additional price cuts were not an option."

"'We didn't want to price them so low that it didn't make any kind of economic sense,' Campbell said. 'Renting will be a better strategy.'"

"Melissa Wallace-Johnson moved in June from Silver Spring, where she and her husband rented, to Station North, where they bought their first home. The couple got a reduced price of $339,000 with upgrades such as granite counters."

"'If we'd bought in Silver Spring, it would have been double the price,' Wallace-Johnson said. 'We've fallen in love with the neighborhood. You can tell it's on the verge of something.'"

"The couple does not regret the decision, despite the conversion to rentals, which Wallace-Johnson said is a better route than slashing prices to try to sell."

"'We went into this knowing we would not be there forever, but we didn't go into it to make money,' she said. 'We wanted to buy and own. We're confident we won't lose money.'"

"WCI Communities Inc. has returned deposits to everyone with reservations for its Plaza Residences - the 23-story tower planned near the Columbia lakefront - while keeping the reservations intact, the company said in a statement this week."

"Barbara Byrd, who lives in the nearby Lakeside condos with her husband, was one of those surprised last week to receive a deposit check back from WCI. Byrd said her excitement when she first saw WCI clear the land quickly evaporated when she saw grass planted on it."

"'It doesn't look like anything is happening now,' she said."

"'It's an example right in our own community of the impact of the housing slump,' said Del. Elizabeth Bobo, whose legislative district includes Town Center, where the tower is planned. 'What I hear from people in the industry and related industries is that it's hitting the high-end market as hard as any others. It's a major local example of what's happening across the country.'"

The Washington Times. "Despite falling home prices and interest rates, the Washington area still is priced far above the earning power of most home buyers, according to a study."

"Purchasing a home in the Washington area requires a steady income of at least $121,197 a year, according to the Center for Housing Policy. The median personal income in the region is $46,782 a year, according to the U.S. Census Bureau."

"Registered nurses, who earned the highest median annual income among high-growth occupations at $63,291 a year, are making only slightly more than half the money needed to buy a home, the nonprofit group reported."

"The other occupations — retail salesman, customer service representative, food preparation worker and office clerk — earned median annual incomes ranging from $21,566 to $39,473."

"Economic trends of the past few months suggest affordability problems might be lessening. However, real estate executives say the home buying market still is in turmoil."

"'The lower pricing would normally make housing more affordable but the lending requirements have tightened, so buyers need more money for down payments than they did two years ago,' said Aaron Liebert, real estate developer JPI's managing partner for the Washington area. 'This has helped the rental housing market, except that there is now a large number of for-sale units — houses and condos — that are being rented individually at deep discounts.'"

"Average rent for a two-bedroom apartment in Washington was $1,286 a month in the third quarter of 2007, the Center reported."

The Connection from Virginia. "Fallout from the real estate bubble is not likely to blow over in the next year, but it may have struck a blow for the cause of 'affordable housing.'"

"Real estate agents emphasize that tumbling sales prices have created a buyer's market. 'For anyone who buys in the next 12 to 16 months, this is the best time IÕve seen to buy since about 1991,' said longtime Loudoun real estate agent Nancy Yahner. 'For anyone who bought in 2005 and 2006,' she acknowledged, 'it's hard on them.'"

"Last year, the average sales price of a home in Loudoun fell by about $40,000, from $547,429 in 2006 to $507,542. It was a significant drop, although not as drastic as the $108,922 leap in sales prices between 2004 and 2005."

"Following that spike, market activity plunged in 2006, with 5,919 residential units sold that year, as opposed to 9,123 the year before. 'I think buyer confidence is quite low out there,' said Yahner. 'People are scared.'"

"She also attributed the slump to the record number of foreclosures last year. A couple of years ago, when banks were able to borrow money from the federal government at low rates, a number of 'less traditional' institutions were lending money without requiring borrowers to verify their incomes, debt ratios or other qualifications, she said."

"'Practically, if you had a pulse, you could buy a house,' said Yahner."

"Melinda Hetzel, deputy commissioner of accounts for Loudoun's Circuit Court, said she had seen some 600 to 700 foreclosure accounts filed last year, while her office had never seen more than 100 such accounts filed in any previous year."

The Post Gazette from Pennsylvania. "A report released yesterday suggests that contrary to many perceptions, Pennsylvania did experience a housing bubble. The Keystone Research Center in Harrisburg recently completed the first detailed study of the housing market in the state, which concluded that hard times still might be ahead for Pennsylvanians due to fallout from subprime mortgages."

"'While the run-up in housing prices began slightly later in Pennsylvania than in the rest of the nation, housing prices here have mirrored the national trend since 2001,' said Stephen Herzenberg, a KRC economist."

"He said that in just five years, from 2001 to 2006, housing prices rose 54 percent, compared with an overall inflation rate of only 13 percent. 'Housing price hikes far outstripped increases in rents and the cost of construction,' Mr. Herzenberg said. 'That is clear evidence of a bubble in Pennsylvania.'"

"According to data in the report, the counties with the greatest share of new home mortgages originated in 2006 that were subprime were Forest, Cameron, Venango and Fayette."

"An estimated 45,500 subprime mortgage foreclosures are projected in Pennsylvania between the third quarter of 2007 and the end of 2009, which the study's authors say represents a loss of $2.4 billion in property values."

The Morning Call from Pennsylvania. "Rural counties in central Pennsylvania and the Philadelphia area are expected to bear the brunt of the mortgage lending crisis in the state, but the Lehigh Valley will also have its share of home foreclosures, according to the Keystone Research Center."

"In Forest County, in northwest Pennsylvania, 46 percent of the mortgages originated in 2006 were subprime, Keystone estimates. In addition, some neighborhoods in the Slate Belt, downtown Allentown and Easton, and Carbon County had levels of subprime mortgages in 2006 that exceeded 30 percent."

"'There is still a lot of uncertainty. [The] area had a large increase in prices. That makes us nervous,' said Mark Price, one of the economists who authored the report. 'The concern going forward is what happens if prices begin to decline.'"

"'It is true in Pennsylvania we have not yet had the level of foreclosures in Ohio and Michigan to our west, and not as much of a decline in housing prices as places like New Jersey and New York to our east,' said Herzenberg. 'We have steered a narrow path between those two extremes. That does not mean we are out of the woods,' he added."

"The report said three factors will help determine which areas will be hit hardest by the expected wave of foreclosures: the percentage of subprime mortgages; the rise in home prices; and unemployment rates."

The Philadelphia Inquirer from Pennsylvania. "Numbers for December and all of 2007 were not yet available for the seven counties surrounding Philadelphia, said Joseph Wadsworth of Hanley Wood Market Intelligence."

"For the first 11 months of 2007, net new-home sales (minus cancellations) in the seven suburban counties fell just 11.3 percent from the January-November period in 2006, Wadsworth said.(Hanley Wood began tracking sales within Philadelphia in August, so no comparisons with 2006 are available.)"

"The pace of sales may have fallen off, but newly built homes are still appealing to some buyers."

"'I'm not one of those people who follows what the media and the public say,' said Vera Germanotta, who, with her daughter, Maria, bought side-by-side units at Westrum Development Co.'s Villas of Packer Park in South Philadelphia, where prices range from the mid-$300,000s to the low $400,000s."

"If there's a new house you really want, you buy it, said Kathleen Czermanski, who has settled in at Wicklow, a development of eight $1 million-plus carriage houses in Wayne. She signed a contract in August 2006, long before the foundation was dug."

"'I wanted to buy there when I first heard about it three or four years ago,' said Czermanski."

"But her house in Malvern isn't selling, even though 'I've reduced the price three times and put $30,000 more into it, even after [putting] a new kitchen and three bathrooms into it.'"

"Czermanski took out a swing loan in the meantime, yet 'I don't regret buying the new house, not for a minute.'"