Some housing bubble news from Wall Street and Washington. CNN Money, "Demand for new homes collapsed last year. Next up could be a similar drop in the rest of the construction market. Economists say a fall-off in nonresidential construction in the face of an economic slowdown shouldn't be a surprise. 'Developers are a little nervous about getting enough rent, getting enough tenants so they're pulling back,' said Jim Haughey, chief economist for Reed Construction Data."

"Industry tracker McGraw-Hill Construction reported that nonresidential construction starts had remained strong through February, then plunged 23% in March, the most recent month for which a reading is available."

"'The degree of credit tightening going on there is very noticeable right now,' said David Seiders, chief economist of the National Association of Home Builders. 'It's frozen up along with the private mortgage-backed security market.'"

"There has been an average of 32,000 job losses a month in the construction sector over the past 12 months. And a slowdown in commercial construction will lead to even more construction job losses."

"'The housing downturn is clearly not over, so this just seems like piling on at this point,' said Seiders."

From MarketWatch. "The hoped-for rebound in home sales failed to blossom this spring, with the housing market caught in a downward spiral as falling prices continue to sap consumer sentiment and keep would-be buyers on the sidelines."

"The final nail in the coffin for the spring-selling period came this week after luxury-home builder Toll Brothers Inc. reported dismal sales figures for the quarter ended in April. The company's CEO, Robert Toll, said traffic levels at its communities were 'the worst that we have ever seen.'"

"Most buyers are canceling because 'they go to their friends and neighbors and say, 'We just bought a new home,' and everybody says, 'What, are you crazy? Prices are dropping,' according to the chief executive."

From Reuters. "Squatting is on the rise across the United States as foreclosures surge, eviction notices mount and homes go unsold for months, complicating the worst U.S. housing slump in a quarter century and forcing real-estate brokers to enlist the help of law enforcement and courts to sell empty houses."

"In some regions, squatting is taking on new twists to include real-estate scams in which thieves 'rent out' abandoned homes they don't own."

"Others involve 'professional squatters' who move from one abandoned home to another posing as tenants who seek cash from banks as a condition to leave the premises -- a process known by real-estate brokers as 'cash for key.'"

"California real-estate broker Steve Smallson said he finds about three squatting cases a month, compared to none last year, in his region of Woodland Hills, a middle-class district of Los Angeles. That includes a case in April involving a foreclosed home worth $1 million where police were called after neighbors reported squatters filming pornography in the house."

From Bloomberg. "Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets, regulatory filings show."

"The balance-sheet adjustments are in addition to $344 billion of writedowns and credit losses already reported on the income statements of more than 100 banks."

"'The smart people are the ones who've identified the problems, put them out there in full transparency, and addressed them by raising more capital,' said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. 'There is still billions of dollars of crap out there that hasn't worked itself through the system.'"

The LA Times. "Nearly two years into a housing decline...many Americans hope the end is near. Most economists believe the worst is yet to come."

"If the country is to avoid a full-scale recession, however, as some analysts are beginning to consider possible, the economy is apparently going to have to pull itself back from the brink without help from the housing industry. 'The housing correction is still going to be with us this time next year,' said Celia Chen, a housing economist at Moody's Economy.com."

"When it comes to housing, the optimists are those who see the near free fall in home prices as encouraging: It may at least shorten the economic agony. 'Because the prices are going down so fast, we'll be hitting the stabilization point sooner,' said Lawrence Yun, chief economist at the National Assn. of Realtors."

"Thomas Lawler, a housing economist, noted that in the last housing price correction, which occurred in the early 1990s, it wound up taking prices seven years to drop 20%. Compared with that protracted slump and recovery, he thinks the current free fall in home prices is a good thing."

"'Do you want a slow bleed?' Lawler asked. 'Wouldn't it be nice to just get it over with? It might be that that's what we're seeing.'"

The St Petersburg Times. "If it was gloom you wanted, there were second and third helpings to be had last week when the National Association of Real Estate Editors met in Dallas. Speaker after speaker, expert after expert, predicted: Wait till next year, or longer. It ain't over."

"Charles McMillan, the new president-elect of the National Association of Realtors, acknowledged that there will be 'few changes in the next few months,' but predicted a 6 percent increase in existing-home sales next year, to 5.7-million homes.

"'There's no national market,' McMillan said, although his 1.2-million-member association routinely reports national sales figures. 'All real estate is local. It's our job to restore confidence in the market.'"

"A questioner in the audience asked about an NAR promotional campaign that started a few years ago, just as the market was going into free fall - 'There's never been a better time to buy a home.' If someone had taken that advice and bought a home, the questioner said, in some markets that house is worth less today. Why should people listen to NAR?'"

"McMillan dodged that bullet. 'Realtors can't guarantee a property will ever increase in value,' he said, and started talking about mortgage fraud."

The Arizona Republic. "Despite the housing slump, home sales at a north Mesa planned community were at full throttle Saturday. Buyers lined up by the dozens, eagerly awaiting the chance to buy a homesite in Mountain Bridge, a Blandford Homes development."

"Buyers flew from Alaska, Canada and other states to nab a piece of desert property."

"Sales kicked off at 9 a.m., when buyers had first pick of 100 lots and 19 models. Many had camped out since Monday, roughing it for a shot at scoring their dream home. 'I flew in just for this,' said Indiana native Lori Schneider, who slept in a Dodge Caliber Friday to earn her spot in line."

"Buyers admitted to being drawn by the desert views and good values. Home prices are between $240,000 and $800,000."

"'I actually would have paid more for this location,' said Bridget Stone, of Phoenix. 'I think after today the pricing will go up.'"

The Montreal Gazette. "On paper, they have assets of more than $1 million. But Paul and Mary Staley (not their real names) aren't feeling all that comfortable these days. They've painted themselves into a bit of a corner with two revenue properties, and are unsure how best to extricate themselves."

"Mary acquired the triplexes in a now-trendy neighbourhood from a relative five years ago. They remortgaged them for $340,000 apiece and used the proceeds to pay off their large suburban home."

"The Staleys' problem is that the monthly cost of the mortgage and taxes on the two rental properties currently exceeds the rent by a fairly hefty sum. They collect $3,367 each month and owe $5,600 to the bank."

"They've been dipping into their line of credit on their home for the shortfalls and renovations, and have pretty much maxed it out."

"'Because the tenants have lived in our buildings a long time, they're paying rents far lower than what you could normally charge in that part of town. And we have a bad tenant who hasn't paid in months. It's very frustrating, working hard and sacrificing like we do to have someone live for free,' said Paul."

"The fact the properties generate less in revenue than they cost each month also suggests a lack of a coherent plan."

"'Is this supposed to be a good investment?' investment adviser John Archer wondered. 'The properties have to rise in value at least 5.35 per cent a year just for the loss to be offset. And this is before any major unexpected expenses. Why are they hanging on to these properties? For their children? If the properties don't make economic sense now, will they necessarily make economic sense when they give them to their kids?'"

"Money is going to be tight for as long as they hold on to both revenue properties, even if they can increase rental revenue and minimize expenses, because a significant part of their monthly employment income is being funnelled into them, said accountant Nick Moraitis."

"While they may come out significantly ahead selling in 10 years if housing prices continue to rise and they don't add more debt, it won't be an easy decade for them and may not be worth the hassle."

"'Their budget and lifestyle will be strained for the next several years to support the triplexes,' Moraitis said. 'I have a hard time seeing why they are keeping rental properties that they are losing money on every month. Just think of the stress-less life without debt, cash in the bank and additional income to spend.'"