The News & Observer reports from North Carolina. "Near the peak of the recent real estate boom along coastal North Carolina's rivers and sounds, William Highfill got an invitation for a gala three-day sales weekend at a new Brunswick County subdivision. It was spring 2006 when Highfill joined a group of enthusiastic buyers from as far away as California."

"Highfill and his son-in-law bought three lots, solely for investment. The entire 200-lot first phase of the project sold out in two days. But today, the nation's housing bust is in full view in Brunswick County: Many of the sought-after lots are sprouting weeds."

"Now, Highfill and Cass are among hundreds of investors along the inner coast who would like to sell. Their broker hasn't had a single nibble, though, since they listed the property in February."

"'We're trying basically to get rid of one or two and hold on to the other in case they do grow in value,' Highfill said. 'But it doesn't seem like anything is moving.'"

"Single-lot sales, though, have fallen to less than a fifth of their peak in late 2005. And foreclosure notices this year are running about 50 percent higher than those in the rest of the state."

"Two years ago, the southeastern corner of the state was the heart of the boom. But foreclosures in Brunswick County set a record last year, said Leslie Bell, the county planning director. He said many of them were on property bought by speculators attracted by soaring prices."

"'I think the market needed to correct itself,' he said. 'We had properties selling out of sight here. Unfortunately, when it hit, it hit hard.'"

"Vinny Annecchiarico moved down from Egg Harbor, N.J., this winter to the Palmetto Creek subdivision, between Supply and Southport in Brunswick County."

"On his block, 16 of the 17 homes have sold - including one he bought for his daughter - along with dozens of others in the immaculately groomed subdivision. The blocks of empty lots at both ends of his own don't worry him."

"'This place is about to boom,' he said. 'The price is right. And if it takes a while, why should I care? I have my pool, and nobody's in it but me.'"

"Last year was a down year for most of the community banks based in the Triangle -- and 2008 is shaping up to be worse. First-quarter profits at the corporate parent of Crescent State Bank of Cary, which has 13 branches, dropped by nearly a third."

"Paragon Commercial of Raleigh has offices in Richmond and Charlotte and caters to small and midsize business customers; its profits fell more steeply: 46 percent. 'We're a cyclical industry,' said Paragon's CEO, Bob Hatley. 'We're at the low end of the cycle right now.'"

"Sales of existing homes in the Triangle plummeted 31.1 percent in May compared with a year earlier, the 11th consecutive monthly decline. It was the largest drop since the national housing slump began affecting the local market in late 2006. Foreclosures have risen almost 19 percent this year."

"Bank failures aren't likely locally, because the Triangle real estate market never overheated and therefore hasn't fallen as hard as others."

"'I can't think of a bank in North Carolina that is headed toward failure,' said Jim Beck, CEO of TrustAtlantic Bank, which started in Raleigh last year. 'I think you are going to see them in other places. I think you're going to see them in Atlanta. I think you're going to see them in Florida.'"

"'I'm not saying we're immune,' said Crescent State Bank's CEO, Mike Carlton, 'but we are certainly sheltered from the problems that are out there.'"

The Times Dispatch from Virginia. "The good news is Virginia was not among the 10 states in June with the highest foreclosure rates in the country. It was No. 11. 'Foreclosures are rising faster in Virginia than almost anywhere else,' said Connie Chamberlin, CEO of a housing advocacy group for the state."

"A year ago, Virginia was in the middle at No. 25, according to RealtyTrac. The number of filings in Virginia increased 204 percent in June from the same month a year ago."

"Virginia's stable economy kept foreclosures at bay, but the problem is catching up here. Moreover, lending practices are loose, possibly more so than in other states, Chamberlin said. 'Our restrictions on lending practices are pretty minimal. No one was minding the store,' she said."

"The rates in Virginia were driven by a high number of foreclosures in Northern Virginia, particularly in Prince William County, Chamberlin said."

"'We know these loans were focused on minority communities. The Hispanics in Northern Virginia, in particular, were targeted,' she said."

The News Leader from Virginia. "There's always a worst-case scenario, and when it comes to the housing crisis, James Madison University economics professor Barkley Rosser's mind goes straight to Washington. D.C. has the highest foreclosure rate increase of any city in the nation."

"The dismal reality of lowered home values and blocks with 75 percent of homes empty has not yet reached Staunton, Waynesboro and Augusta County. But with hundreds of subprime mortgages likely to reset in the next year, concerns about the economy cause many to wonder what will happen when our day comes."

"The number of subprime mortgages nationwide has skyrocketed in the past few years, according to Rosser, largely because the price of housing went up so quickly and few could afford a new home."

"'It was a sign that people needed to take those mortgages to afford the housing,' Rosser said."

"Most local loans consist of borrowers refinancing their homes rather than first-time buyers, according to the Fed. Given that, there's a possibility many of the loans are simply homeowners taking advantage of a seemingly good deal and should be ready for the interest rate reset when it comes, Rosser said."

"If that's the case, Staunton, Waynesboro and Augusta County might leave the situation relatively unscathed. 'No way we're going to be like Manassas,' Rosser said. 'Forget it.'"

The Baltimore Sun. "The decision to buy a vacation house puts a number of factors in play, especially in the current market, which is as flat as week-old beer. According to a National Association of Realtors survey, sales of vacation houses decreased by more than 30 percent in 2007, with the median sales price also falling."

"'We went through a four-year period where price appreciation was 20 percent a year,' says Pat Campbell-White at Re/Max Realty Group in Rehoboth, Del. 'And that can't go on forever.'"

"Kensington residents Richard and Marie Sippel, both still working full time, bought their second home in Woodland Beach north of Lewes, Del., specifically with eventual retirement in mind."

"'What we're expecting to do is sell this house [when we retire] and get a condo in Washington, [D.C.], and spend 50 percent or more of the time at Woodland Beach,' says Marie Sippel."

"The recent phenomenon of 'come backs' (people who retire to Florida then realize it's miserable in summer and their children and grandchildren don't visit as often as they'd like) and 'half-backs' (those from farther north who found Maryland's milder climate and shorter distance to children more appealing than Florida and Georgia) are part of a new migration interested in the retirement potential of vacation houses in the state."

"'The winters aren't bad in this region, and even though where we are is secluded, it's relatively close to a lot of things,' says Sippel, who stays at her Woodland Beach property a couple of times a month."

"While the number of vacation-home sales is down across the board and bidding wars are a thing of the past, in some areas, values are steady."

"'People up here sell because they don't use the house that much anymore, but it's almost never a distress situation,' says Mike Kennedy of Railey Realty in Deep Creek. 'You have a lot who will wait for their price.'"

"In other areas, however, prices have come down a chunk. Vacation houses in Ocean City are down as much as 25 percent, according to Ed Shepherd, Realtor in Ocean City. Still, a recent NAR survey found that eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 59 percent of those buying a primary residence."

"'Opportunities abound,' says Jeff Maguire, a sales representative with Distinguished Properties in Annapolis. 'People are able to pick up some extraordinary properties at favorable prices.'"

"Yet even with those factors, some potential buyers are hesitant to commit, worried that the market has farther to fall. Like the market top, the bottom is often only visible in hindsight. Campbell-White, who has been through several up-and-down cycles in 35 years as a broker, suggests that, if you find the house that fits your criteria at a price you can afford, you should go for it."

"'If you're waiting for a market bottom, you're going to miss it,' she says."

"Also, since a vacation/retirement home buyer typically expects to own the property longer than 10 years, the potential for appreciation is greater since owners can wait out market lows. And while the median price of a vacation house has declined recently, the longer-term trajectory is up."

"'If you bought in 2001 and you want to sell, you're still going to make money,' Shepherd says. 'You won't make as much as if you'd sold at the peak, but you won't lose.'"