Inside Bay Area reports from California. "Steve Fernandes held an 'Open House' on a recent Saturday morning...on a cold, hazy Central Valley day. Fernandes had two interested parties that stopped by looking over the four-bedroom, three-bath, 3,176-square-foot Centex home. But Fernandes, a broker, wasn't selling the home. He's renting it out for $1,995 a month."

"Fernandes said that he has been contacted by several people who want him to rent their homes in nearby Mountain House, a master-planned community near Tracy made up of 14 neighborhoods built by Lennar Corp., Pulte Homes and Centex Homes."

"'Mainly, it's to help pay the mortgage,' he said. 'They don't want to sell right now, and they can't afford to hold onto the property.'"

"Fernandes said a lot of owners believe the 'market will come back.' 'When people are paying $4,000 a month and being foreclosed on, renting a new house for $2,000 is very attractive,' he said."

"The renters, a large portion escaping foreclosure, are willing to pay $2,000 to $3,000 a month for a new house in the same neighborhood or school district for half of a mortgage payment."

"Robin Chatham, a Brentwood real estate agent, said that it's the individual owners who are renting out the properties, not banks. 'They (banks) don't want the liability,' she said. 'They want to sell it quickly and don't want a tenant.'"

"Chatham said that investors are also buying blocks of homes and renting them out temporarily before 'a turnaround' and higher property values."

The Contra Costa Times. "A South Bay home builder, put off by the sluggish economy and the housing slump, has backed out of a deal to buy the former Oak Park Elementary School site from Contra Costa County."

"SummerHill Homes of Palo Alto bid $22 million in June for the 10-acre property in Pleasant Hill and planned to build as many as 96 single-family homes. SummerHill had paid $400,000 to hold the option when it notified the county in December that it did not want to proceed with the purchase."

"A spokeswoman who declined to give her name said the company 'terminated the contract due to current economic conditions.'"

The Press Democrat. "Construction of new homes in Sonoma County fell to the lowest level in more than a decade last year as builders scaled back in the face of slumping sales and declining prices. The price of a typical new home has dropped 19.1 percent, according to The Gregory Group."

"Forecasts call for Sonoma County housing starts to be 800 to 1,000 this year. That would be the lowest total in the 20 years the building trade group has tracked new construction."

"'That really does give you an idea of the depth of the problem. It reflects very weak demand,' said Steve Cochrane, regional economist. 'We've never seen a glut quite like what we have today.'"

"Ryder Homes, a longtime county builder, began selling at its Countryside subdivision in southwest Santa Rosa last year and expected to close out the 39-home project within the year. So far, 21 have been built and 15 sold, said David Hunter, Ryder's construction director in Sonoma County."

"Sales also were slower than expected at Willows Wild, a 14-home Sonoma subdivision Ryder also expected to complete last year. So far, seven have been built and three sold, Hunter said."

"'The bottom isn't here yet,' he said."

The Sacramento Bee. "The city of Sacramento this month will give pink slips to at least 16 workers, the first wave of severe cutbacks for a municipality grappling with an estimated $55 million budget deficit next fiscal year."

"'It's painful to go through this,' said City Manager Ray Kerridge said. 'But I would be lying if I didn't say some warm bodies are going to leave the city's employment.'"

"'To my knowledge, we've never before laid off anyone,' said Assistant City Manager Marty Hanneman."

"'Unfortunately, these layoffs could have been averted had the city been more fiscally responsible and had the foresight to see the impending downturn and commercial real estate market,' the Union representatives from Stationary Engineers Local 39 news release stated."

The Modesto Bee. "Diablo Grande, the luxury golf resort in the hills of western Stanislaus County, is in financial trouble and has closed its two golf courses."

"To date, the two acclaimed golf courses, about 400 homes and a production winery have been built. The rest remains on paper."

"The clubhouse doors were locked Wednesday, and signs were posted saying the golf courses were off-limits. 'We are in a temporary suspension mode. We don't know how long it will last,' said Dwain Sanders, VP of development at the resort. 'We are feeling the effect of the housing market, just like everyone else. We aren't getting enough revenue to keep them open during the downturn.'"

"Sam Gardali, who along with his wife bought a second home in the resort to take advantage of the golf courses, said he wasn't happy with how the course closures will affect property values at Diablo Grande."

"'Those are two beautiful golf courses; we love to play them,' he said. 'That's one of the reasons we decided to purchase a second home up there.'"

The Press Telegram. "A former aerospace facility being developed as one of Southern California's largest commercial projects may not include housing as planned...largely to poor conditions in the housing market."

"Up to 1,400 residences, mostly single-family homes, were to be constructed on the site. 'At this point we're evaluating options other than housing,' said Stephane Wandel, with Boeing Realty."

"Long Beach City Manager Pat West favors eliminating the housing component, which has been a controversial aspect from the proposal's inception. 'We're excited,' West said. 'Houses are great, but right now we're really trying to stem the tide of the loss of manufacturing jobs and facilitate the creation of white-collar jobs.'"

"'It makes sense,' said Jack Kyser, chief economist of the Los Angeles Economic Development Corp.'I think people are looking at the realities of the housing industry and how soon will it come back. The market has been screaming 'Do industrial space,' but nobody has been listening because it was more financially rewarding to do housing - until now.'"

The Orange County Register. "California real estate licenses dropped last month from the year before for the first time since March 1999, ending a 7 ½ upswing in which licensees increased by 81 percent."

"The California Department of Real Estate reported that the state had 548,959 licensees last month. That's still the third highest number on record, and it's equal to one licensee for every 22 California households or one for every 1.4 homes sold last year."

"That's down 0.1% from the number of licensees in December 2006. Local real estate executives say agents and mortgage brokers have left the business in droves, or taken other jobs to make ends meet as the number of sales fell to their lowest level in at least two decades. The count of licensees is slow to drop since they're good for four years before requiring renewal."

"'When you have an up market and people perceive it's easy to make money in real estate, all these newbies come in,' said Phil Schaefer, past president of the Pacific West Association of Realtors. 'A lot of these people that get in thinking it's quick and easy find out it's not quick and easy.'"

"Just 2,463 license tests were administered in December, the lowest number since November 2000, DRE statistics show. Exams have dropped steadily from nearly 16,000 administered in September, the last month before new regulations kicked in requiring that applicants take two additional real estate courses to qualify for taking the test."

"'It's going through the floor,' DRE spokesman Tom Pool said of license exams."

"Pool noted that a dramatic upswing in the number of licenses issued began in the spring of 2001, following the bursting of the dot-com bubble and the lowering of mortgage interest rates."

"Pool speculated that many got real estate licenses and went to work as loan officers and mortgage brokers. 'It paints an interesting picture,' Pool said. 'One boom stopped and it kind of transitioned into another.'"

From The Sun. "New housing, an important step toward downtown revitalization, must be reinforced by city services and good planning to be successful. It's great to see a housing project like the new Meadowbrook Park Lofts in downtown San Bernardino."

"Unfortunately, downtown San Bernardino is anything but trendy. But you have to start somewhere. The lofts are not cheap at $350,000 to $360,000, but ANR Homes and the city have partnered to offer a $100,000 down-payment assistance program for buyers who already live or work in San Bernardino."

"Security from crime will be an issue. The Meadowbrook Park Lofts project draws its idyllic-sounding name from the park across the street, but unfortunately that park harbors homeless people and druggies after dark. If the unsold lofts suffer break-ins and defacing, they will be that much harder to move in a worsening economy and a deflated housing market."

"How about a special incentive program for police officers to buy and live there? That could help keep the new project secure."

"The Fed slashed rates for the second time in eight days on Wednesday. Throughout the Inland Empire and the United States, asking prices on homes continue to fall. Foreclosures across the nation are at a record pace, driving home prices even lower."

"Activity in the housing market has perked up in recent months, as prices have dropped precipitously and rates have remained low, said Brian Weide, a broker with Sunstar Mortgage Services in Ontario."

"'Sales prices are low compared to three years ago, and sellers are willing to give away the farm in terms of picking up closing costs and lowering prices. Buyers are starting to think they don't want to miss opportunities,' he said."

"Economist Jack Kyser...said he uses a measurement called the 'unsold inventory index' to gauge housing market strength. He said single-family homes in the region were staying on the market an average of 14.5 months, up from 5.9 months in December 2006."

"'Buyers should be very cautious,' he said."

The Daily Press. "The High Desert housing market is certainly not on the rise, but it may be leveling off. That was the message Robert Kleinhenz, Deputy Chief Economist for the California Association of Realtors, brought to an audience of nearly 400."

"While his research shows that sales on houses will continue to decrease, it will be at a much slower pace than the drop that occurred in 2007. 'Median home prices are down slightly,' he said. 'Mortgage rates are very favorable. The problem is not going to be mortgage rates in 2008. The trick is going to be getting the loan funded.'"

"Still, with the population of the Inland Empire is set to overtake Orange County by 2020 and median home prices are lower in the High Desert than just about anywhere else. So Kleinhenz recommends purchasing property here if investors can hold onto their purchase for some time."

"'You can’t lose if you buy here,' he said."