The Herald Times reports from Indiana. "In May 2006, a middle-aged couple decided to sell their Morgan County ranch home. So they contacted broker Sheila Scott in Martinsville, and told her they wanted to list the home at $209,000 — $10,000 more than its appraised value. 'It was a beautiful home in wonderful condition,' Scott said. 'Three years ago it would have sold very quickly — and for full price.'"

"But no sooner had Scott listed the property than the air began seeping out of the housing-price bubble. An oversupply of homes in the area and a paucity of qualified buyers meant that...the house languished on the market. 'The market just went dead,' Scott said."

"For 17 months, the couple paid a total of $2,400 each month to cover two mortgage payments. The same month they had put their house on the market, they also had moved into a $347,000 home in northern Morgan County."

"They finally sold their first home last October for $171,500, 14 percent lower than its appraised value. To add insult to injury, the buyers required the couple to forfeit their refrigerator, putty all the nail holes on the home’s exterior, and give it a fresh coat of paint."

"'What happened to them broke my heart,' Scott said. 'But the buyers got a fantastic deal.'"

"Ken Blackwell, owner of Blackwell Construction in Bloomington, blames the slowdown on the national credit crunch coupled with a glut of single-family homes on the market."

"'When things are going well, everyone becomes a developer and builder, flooding the market with too much inventory,' he said. 'Today, you can drive around Bloomington and see subdivisions no one has even heard of.'"

"Steve Martin, chairman of the Real Estate Certification Program, said central Indiana is in a catch-up cycle. 'For seven years we were in a free-fall spending cycle, with people taking mortgages they could not afford,' he said. 'Now we're catching our breath and being more realistic about our spending.'"

The Record Eagle from Michigan. "Jacki and Ben Newhouse can't find a buyer for their two-bedroom home that's listed for $8,000 less than its appraised value. Yet Acme Township's assessor said the property's value increased $6,400 last year."

"'We haven't seen a big decrease like downstate, but it is a leveling off,' said Laurie Spencer, equalization director for Grand Traverse and Leelanau counties. 'Some are going up, some are slightly decreasing, but a lot of them aren't going to change much at all.'"

"That doesn't make much sense to Jackie Newhouse, who hasn't had an offer on her renovated house in two months. 'I don't understand it. Everything you see tells you the market is terrible,' Newhouse said. 'Our house has gone through a complete renovation, but I'm not trying to recoup any of our improvements. I'm just hoping to get a little bit of our equity out of it.'"

"'We've lost 20 percent of market value in the last two and a half years,' said real estate agent Carol Franklin of Traverse City. 'Without a doubt, the local market is declining and it's still declining.'"

"Real estate broker Cindy Anderson said she has clients listing homes near downtown Traverse City for $30,000 less than the appraised value. 'I have a sinking feeling assessors don't realize that some homeowners are having to sometimes sell for $20,000, $30,000, $40,000 less than what they bought for a few years ago,' she said."

"In Traverse City, city assessor Debra Chavez said the city witnessed the largest hike because it doesn't have new subdivisions and builders trying to unload their inventory. But not everyone in the city will see an increase. Many homes priced around $150,000 or less dropped 10 percent or more, Chavez said."

"'They were being kept artificially high by the market and have dropped back down to where they should be,' Chavez said."

"Franklin and Anderson said foreclosures started affecting the market last fall, and now account for about 10 percent of sales."

"'Banks are sitting on a huge inventory right now and they are putting liquidation prices on the houses to try and unload them,' Franklin said. 'So sellers have to compete with the banks prices.'"

"Foreclosures in Grand Traverse County jumped 63 percent in 2007, peaking at 291. Grand Traverse Register of Deeds Peggy Haines said indications are 2008 will be just as bad or worse. Already, 68 homes are in foreclosure, just two months into the new year."

"'There's assessed value, taxable value ... and market value and I've learned they have nothing to do with each other,' said Kalkaska area real estate broker Sue Vowels. 'They are not from the same country, they're not even from the same planet.'"

The Livingston Community News from Michigan. "Mike and Amanda Prince have a plan. They think it's a good one. Despite a housing market with a larger-than-ever inventory and stagnant or slipping sale prices, the South Lyon couple hopes to sell their condo, rent an apartment for a year while they save money, and then get a better-than-average deal on a new house."

"The couple, both in their mid-20s, got married last fall and now have Sam, an Australian shepherd, and 'some more space would be nice,' Mike Prince said. He was renting a condo with a roommate in South Lyon in 2005 when the property went up for sale."

"'It seemed like a good idea at the time to buy it,' he said. 'Given what's happened in the market, I would have waited.'"

"Prince bought his condo in 2005 for $119,900 and it is listed now for $115,000 - so he gained no equity. But they still want to move."

"So on the advice of Karen Jolley of Buckley Jolley Real Estate Team in Brighton, the couple decided to sell the condo and wait to buy a house. Prince said he is hopeful they will still get a good deal on a house in the $300,000 range when the time is right."

"'It's tough. We have it listed at a slightly lower than purchased price,' he said. 'You take the sting now. The nice thing is there's no sense of urgency. It allows us to take our time and not fight the market,' he added."

"'I wouldn't say the market has turned around, but there are buyers out there,' said Michelle Brant, executive VP for the Livingston County Association of Realtors."

"The average sale price in Livingston dropped 10 percent from 2006 to 2007 from $242,043 to $219,566 - but is still higher than nearby Oakland and Wayne counties, where average sale prices have dropped to $210,149 and $105,635 respectively, according to information from Brant."

"Jane Pendleton, president of the LCAR, said it has taken a few years for homeowners to understand the market adjustments and to accept listing prices that will sell."

"But, she said, they now have. 'The biggest change,' she said. 'Is that sellers are on board. What we need to do is remind people that there are still good deals out there, and to regain confidence in the market.'"

"Todd Buckley of the Buckley Jolley Real Estate Team in Brighton, who has been in the business 11 years, said property owners are coming to terms with what the market will bear. 'This is today's new normal,' he added. 'Unfortunately, we can't look at the values three years ago - in moving forward, we have to think differently.'"

The Daily Northwestern from Illinois. "The number of Evanston homeowners unable to pay their mortgages tripled in the past year, leaving more than 300 homes in a state of mortgage crisis."

"About 220 homes in Evanston are in a pre-foreclosure state, meaning owners are three or more months behind on mortgage payments, according to RealtyTrac. About 65 properties are bank-owned, and about 35 are being sold in auction, often at below-market prices."

"In Evanston, the crisis will likely lower property values and hurt the city's income from taxes, said John Lee Bingham, a realtor with Baird and Warner who submitted a report to Mayor Lorraine Morton about the problem."

"The problem of foreclosures has grown worse in the past year due to skyrocketing mortgage rates and, sometimes, irresponsible financial decisions, Bingham said."

"'Once in a while you'd even see what I think is the most foolish thing of all, and that would be people living way beyond their means,' he said. 'We joke about it, but I've seen people living in Wilmette in a big house and they have no furniture. I'd say most people are one health problem away from bankruptcy.'"

"Property values are based on supply and demand, Bingham said, which makes foreclosures a problem for the entire neighborhood. When homeowners are unable to pay their mortgage, their home can be seized by the mortgage company and sold for a lower price than the market value."

"This drives down prices in the surrounding area, making neighbors sell their homes for less than they paid originally."

"Bingham said the housing market could be helped by real estate agents and homeowners looking to other strategies to sell their properties instead of lowering prices, which in turn lowers prices in the whole area."

"'People depend so heavily on price to sell their condos and their houses, when you can benefit everyone in the building and keep the price respectable,' he said."

"Although Evanston's housing market is better than in many cities, Bingham said he has seen many property owners lose their homes to high mortgage prices."

"'It's devastating for so many people that this has happened,' Bingham said. 'I was watching people buy homes that had dreamed of owning homes all their life. They're losing those homes now.'"

The Watertown Daily Times from Wisconsin. "With the mortgage rate freeze and the housing industry in a slump the number of foreclosures in Dodge and Jefferson counties is on the rise."

"Twenty-nine Dodge County residents have lost their homes in foreclosures already this year with another 100 more properties ready to be sold, according to Dodge County Sheriff's Department Chief Deputy Blaine Lauersdorf."

"'And we are only in February which leads me to be believe we will be going over the 160 mark by the end of the year,' he added."

"One-hundred sixty is the number of home foreclosures in the county in 2004, the largest total in many years. The numbers are up significantly from the beginning of the decade, when 82 auctions were held in 2002 and 75 reported in 2003."

"'We are seeing them happen more frequently these days,' he said. 'My belief is the interest rates and the balloons (payments) that have come due are causing people to struggle to find ways to pay for those mortgages,' Lauersdorf said. 'A couple of years ago the money was easy to get for mortgages and now people are struggling to pay for the homes they purchased.'"

"Occasionally, a lot of people attend a sale, but 'about 90 percent of the sales go back to the plaintiff representative or the bank or the lender,' he said. 'Many times no one attends and the property goes back to the lender."

"Sgt. Jerry Haferman of the Jefferson County Sheriff's Department...said the foreclosure trend is something his department is, of course, very aware of as being on the increase, but he said other sheriff's departments throughout the state are also being forced to dedicate increased amounts of time and manpower to the process."

"'We are noticing a lot, but this is something that is happening throughout the state,' he said."

"'I attended a civil process meeting in Oneida County recently, and 10 other counties' representatives were there and every county is seeing a drastic increase in foreclosures. We dedicate several days a month to conducting these sales and other counties do the same, and some sheriff's departments are still having to increase the numbers of sales they have to hold,' Haferman said."