The Chicago Tribune reports from Illinois. "Chicago-area sales of existing homes took their worst plunge since at least 1998 in January, and the median price dropped for the first time in at least a decade, according to the Illinois Association of Realtors. January sales of single-family homes and condos in the Chicago area were off 34 percent from January 2007. 'We can't blame it all on the weather, but we all know what January was like,' said association spokeswoman Ann Londrigan. 'Compounding problems with consumer confidence and mortgage tightening, there's not much good about January that you can say.'"

"Though Chicago real estate agents report that many sellers are cutting their prices, analysts see others clinging to outdated notions of pricing and remaining a roadblock to the recovery."

"'I do think there's a stubbornness there, particularly in high-priced markets like Chicago,' said Caroline Sallee, an economist for Anderson Economic Group. 'People aren't coming down on the price, so the home doesn't sell and you continue to see inventory [of homes for sale] rise.'"

"Linda Rizzuto, for one, said she isn't inclined to come down from the $444,900 she's asking for the Northwest Side home where she has lived 17 years, though not one would-be buyer has looked at it since she listed it in January."

"'My friends think I'm crazy for putting the house up for sale now because the market is bad,' she said. 'If I had to sell, I would be panicking, but I don't have to sell.'"

"Glen Ellyn real estate agent Karen Lippoldt said sellers 'need to get more aggressive with pricing.' Nonetheless, asking prices are coming down. 'I had over $500,000 in price reductions for the year in 2007,' she said."

"She said that in her area, builders were skewing the price data with huge cuts just to get homes off their books. And homes do sell, she said. 'I have three homes under contract,' Lippoldt said. 'None of [the sellers] got what they wanted, but was it a fair price? Yes.'"

"Hoping to avoid bankruptcy, home builder Kimball Hill Inc., said Wednesday that it will scale back on operations and reduce staff, including at its headquarters."

"The Rolling Meadows-based builder will exit the Florida housing market. It also will lay off 132 employees at its headquarters and elsewhere around the country by December, the 39-year-old company announced."

"Kimball's fortunes have taken a radical turn since 2006 when it had more than $1 billion in sales. By the end of its fiscal year Sept. 30, it reported losses of $220.5 million on revenues of $894.7 million. It is holding 10,955 house lots that are in development or completed."

"This year, 'the marketplace is fickle, buyers are fearful and traffic has fallen off sharply' during a frigid, snowy winter, said Kenneth Love, Kimball Hill's CEO during an interview."

"Property markets are reaping the results of the lax underwriting criteria that prevailed early in the decade and pumped up house sales to booming levels, he added. 'We're now seeing results of the excesses of 2003 through 2006,' Love said."

"At its Settlers Ridge subdivision in Sugar Grove, where it has sold about 100 units since May 2006, it still has approximately 800 unsold house lots, said Elizabeth Drozdik, director of market research for a Schaumburg-based real estate consulting firm."

"The timing of the development was unfortunate. 'Sugar Grove came on market when housing was already hurting, but the industry was in denial and no one understood how bad things would get,' Drozdik said."

The Beacon News from Illinois. "Allyn Burkett has shown her house five times in five months, and not a single offer. The Sugar Grove woman has concluded it's not her but the market that is straining her finances and delaying her move back home to Texas."

"And she should know. Burkett is a Realtor in Elburn who said she has tried 'all the tricks of the trade,' but 'I just don't know anymore.'"

"'I thought I was going to get (an offer), but they decided my living room was not big enough,' Burkett said. 'It was one measly thing that broke the deal.'"

"Now that Burkett has stepped foot in her clients' shoes, there's some advice she has for sellers: 'You just have to be patient.' She also says, 'If you don't have to sell right now, don't.'"

The Herald News from Illinois. "Over the last two years, Gladstone Builders has used a number of methods to stay afloat in a sinking housing market. When the company ran out of ways to reduce costs, it turned to village hall. In order to maintain its lower prices, Gladstone asked the village to consider slashing its fees if the company buys building permits in bulk."

"'I need the village's help, quite frankly,' said Adam Dontz, VP of Gladstone Builders and Developers."

"Trustee Paul Fay said he was reluctant to support the plan and that the village's first responsibility is to its taxpayers. Trustee Larry Vaupel noted that helping residential builders like Gladstone could send a message to commercial developers, who need residential rooftops to be successful."

"'I can hear naysayers and critics already, saying ... we're giving in to developers or letting developers off the hook,' Vaupel said. 'This isn't government versus big business. I wonder how a half-built subdivision serves (taxpayers') interests.'"

"Gladstone's marketing campaigns gave the company a boost -- an offer to reduce its single-family homes by $100,000 generated 20 sales in two days. Gladstone homes are priced at about $496,000 for single-family houses and more than $300,000 for townhomes."

"Of the 33 building permits the village issued in January, 14 were for Gladstone homes. However, faced with a local residential lot supply that far exceeds demand, Dontz said Gladstone likely would not issue 14 permits in a single month again without the village's help."

The News Democrat from Illinois. "Home sales were down about 25 percent in January from the same month a year ago in St. Clair and Madison counties, according to local Realtors' associations."

"Lynn Turpin, of Belleville, has been attempting to sell his condo on Garrettsen Drive for the last four or five months. 'We've had an awful lot of people interested,' the 77-year-old said, although no deal has come through on the two-bedroom condo with hardwood floors and a Jacuzzi."

"'I don't think I've got it overpriced,' he said."

"Belleville Realtor and National Association of Realtors director Stan Sieron said the recent subprime market woes and declining sales have forced Realtors to work harder and smarter. 'The days of order-taking are out the window,' he said."

From Crain's Detroit Business in Michigan. "For local banks, 2007 was interesting. It was also a financial mess. Driven by much higher provisions for loan losses and by bad-loan write-offs — the bulk of which bankers said were caused by the collapse of land development, housing sales, and commercial and real estate development — most banks lost money."

"Most had worse years than in 2006. Many of them finished with fourth quarters that would have seemed disastrous a year ago."

"'A lot of the home builders in Michigan have wiped away years of earnings and many have filed bankruptcy. It's hard to say it's stabilized,' said Terry McEvoy, an equity analyst for Oppenheimer & Co Inc. 'If there's a continuing decline in home values, those banks with exposure to the real estate market will continue to face losses.'"

"David Scharf, senior equity research analyst with Cleveland-based FTN Midwest, said one positive note is banks are rethinking how aggressively they've been moving assets off their balance sheets, in some cases by selling foreclosed properties at fire-sale prices, which just creates problems for other customers trying to move inventory."

"'In some cases, they've been taking a 50 percent haircut. Now, they're going to take a more thoughtful approach,' he said."

The County Press from Michigan. "With foreclosures of homes in Lapeer County soaring to new heights, the federal government is offering a beacon of hope to deter the onset of blight in neighborhoods devastated by the housing crisis."

"The U.S. Department of Housing and Urban Development is offering local governments the chance to buy unsold repossessed HUD-owned homes for $1."

"'They're vacant homes the Federal Housing Administration is unable to sell after six months,' said Lapeer County Community Development Director Mike Partlo. 'There is a 10-day window where local governments may purchase the single family homes for $1.'"

The Grand Rapids Press from Michigan. "A home in foreclosure, plastered with postings, warning signs and notices, is a symbol of loss for the previous owner. But for those participating in West Michigan's first foreclosure tour Saturday, the bank-owned properties represented potential, at a deep discount."

"'This is what I do,' said William Bryant, who owns four rental properties already. 'I'm a businessman. I want to know how to get the best for my money; that's why we're shopping for foreclosures.'"

"Realtor James Goetzka started the tour by telling the group that the current housing market, although unfortunate for those losing their homes, is providing an opportunity. 'It won't last long,' he said. 'It will be a little window in history.'"

The Journal Sentinel from Wisconsin. "Twenty-one Wisconsin banks didn't turn a profit last year, as the housing slump lingered and a slowdown in the economy deepened, a new report by regulators shows."

"Banking consultant David L. Donihue said the housing market remains weak and that the slowdown appears to be spreading to commercial construction in addition to residential developments."

"'I think it's going to take the rest of this year for things to turn around,' Donihue said. 'I think people are just kind of pulling back on what they had been buying and waiting to see what's going to happen.'"

"Daryll Lund, CEO of the Community Bankers of Wisconsin, said the housing and economic slowdown have caused bankers to 'hunker down' for the time being and bolster lending standards."

"'Segments like the condo market have really kind of hit the wall a little bit,' he said. 'Some of those development projects that probably a few years ago were given the green light a lot more quickly are now demanding higher amounts of units be sold before the financing can be put in place.'"

The Sun Times. "While numerous suburban home builders are struggling, Chicago-based Terrapin Properties LLC is emerging as the first major condo developer here to see operations spin out of control in the current housing slowdown. A foreclosure suit filed against Terrapin over a project in Kenosha, Wis., indicates the company could be dissolved."

"Indymac Bank, the primary lender on the 162-unit condo development in Kenosha, last month sued Terrapin for more than $13 million in back debts."

"But the case isn't a garden-variety foreclosure in which a lender has no recourse beyond getting the keys to the property. Terrapin's principals, including James Geleerd and Michael Ezgur, personally guaranteed the loan, according to the suit. Indymac is going after them, as well as principals Sherwin Braun and Greg Braun, to collect."

"As a result, the control of other Terrapin projects could be in play. Terrapin also controls units left over from previous projects. The company's Web site said it also has projects in Arizona and Florida, plus commercial space in Chicago buildings."

"Sources said Geleerd begged for time Friday on a conference call with a large number of creditors. They said Geleerd asserted he was close to selling the Burnham Pointe condo inventory to somebody whose cash would prop up the company."

"'The atmosphere was pretty intense,' one person said. 'And nobody believes that in this market, there's an investor looking for condos.'"

The Pioneer Press from Minnesota. "The CEO of Franklin Bank in Minneapolis has watched during the past year as foreclosures in North Minneapolis have multiplied to the point where just about every block in the neighborhood has at least one vacant home."

"'I think there is opportunity in the midst of this chaos for community banks to be back at the table and be one of the main lenders in the mortgage industry again,' Dorothy Bridges said."

"For Bridges, North Minneapolis is more than a place to do business. She owns a home there, and...she also encouraged her son to buy a home there. Six years ago, Myron Bridges paid $130,000 for a new two-story beige and white house on Dupont Avenue."

"Until recently, Myron Bridges' home looked like a smart investment. In November, it was appraised at $171,000. But then a string of foreclosed homes on Dupont Avenue and in the surrounding area pulled the property value down. Last month, his mortgage company said the home was worth $105,000. He didn't have enough equity in the home to refinance again."

"To make things worse, his mortgage payment recently jumped $200 to $1,310 a month, when the adjustable-rate mortgage he got when he refinanced three years ago reset. 'I can't sustain that rate for a whole year,' he said. 'We're stretching.'"

"As much as Bridges wants to help, there are limits to what the bank can do. She's running a bank, not a charitable organization."

"'The risk and the reward is something we're in the process of investigating,' she said. 'If it doesn't have a mutual benefit (to Franklin and the community) then it doesn't make sense for us to do. We still have to generate some level of profit.'"

The Minnesota Daily. "In the last year, the explosion of residential property values of the early 21st century slowed, partly because of repercussions of the sub-prime mortgage crisis. Though it wasn't good news for Wall Street, the resulting higher vacancies and lowered property values could be a boon for renters in the Twin Cities, especially students."

"V.V. Chari, an economics professor, said the foreclosures that came out of the sub-prime mortgage crisis have put downward pressure on housing costs. 'Difficulties in the sub-prime mortgage debacle and the slowing of the economy in general, reduced land prices quite substantially,' Chari said. 'It has tended to reduce housing cost.'"

"While student neighborhoods have largely escaped the foreclosures that plague other parts of the Twin Cities, renters, who make up more than 90 percent of residents in the University neighborhood, still benefit from this spillover. Although students live in a region of Minneapolis with a low vacancy rate - about half that of the city as a whole - rent in the University area, at $818, is still below the city average of $868, according to the 2007 Minneapolis Trends Report."

"The condominium boom of the early 21st century, which introduced thousands of units into the city, has also helped stabilize rent prices."

"Cecilia Bolognesi, principal planner for Community and Economic Development, said a factor affecting rent could be the many condos transformed into rental units in recent months, in a sense, flooding the market."

"In October 2007, three large condo projects in Minneapolis announced they were being foreclosed by lenders. Together, the three projects had a cumulative 553 units."

"Bolognesi said another factor is that many developers in Minneapolis have turned to building rental units instead of condos or single family homes."

"Senior Kait Sergenian said she currently lives in the Phillips neighborhood of Minneapolis. 'It's slightly easier every year,' Sergenian said. 'I had less people with me, and also we were looking outside campus, so the quality of houses was slightly better.'"

"Junior Skyler Nowinski said he pays roughly $400 a month to sublease a room in a house with three other roommates. 'Personally, things have become cheaper for me,' he said."