The Sacramento Bee reports from California. "It's the question faced by thousands making peak 2005 loan payments on a home with 2008 values: Should I stay or should I go? In Antelope, Randy Fatius has had it. He says he's walking away from the 1,200-square-foot house he bought in October 2005. Fatius made his last payment in March. Until April, he had never missed a payment."

"'I thought that was the best I could do with the situation,' Fatius says."

"The three-bedroom, two-bath home he bought for $312,000 with no money down is now worth $184,000, according to Zillow. But a slightly smaller house near him is listed at $125,000 and has been on the market for 119 days. Within a mile, he counts nearly 80 homes owned by banks or in varying states of foreclosure."

"Walking away is embarrassing, Fatius admits. But staying is 'stupid,' he says."

"'I crunched the numbers and it floored me,' he says. He figures he's lost around $200,000 in less than three years and that 'it would take me 17 years to get back the value I've lost.'"

"He knows what he's in for. 'My credit score is going to tank,' he says. But he thinks the penalty isn't as bad as owning a house whose value has dropped so far below what he owes."

"This was the first home Fatius bought. 'I don't think I'll ever buy a house again,' he says."

"And, finally, don't start in with him about standard advice to call his lender for help. He did, he says, and got no help that could have made much of a difference."

"Looking back almost three years after buying, Fatius says, 'I had a gut feeling from the beginning I shouldn't have done it. I've felt it the whole time.'"

"Sacramento County has had almost 9,400 foreclosures so far this year."

"Corner by corner, the gradual metamorphosis of Sacramento's core continues to unfold, much as it has for the past decade. Downtown isn't immune to market forces. Projects opening now were mostly started during the real estate boom - and were too far along to stop when the bottom fell out. Housing has been particularly hard hit."

"Downtown developers say they've had to heavily discount their product to move it, and they're making little, if any, profit these days."

"'This is a depression in real estate; everybody who was really flying high isn't anymore,' said developer Mark Friedman, who has sold 12 of his 26 Sutter Brownstones in midtown."

The Mercury News. "Santa Clara County just closed a third straight year of slower growth in property values, Assessor Larry Stone said Thursday, as plunging starter-home prices undercut a booming market for commercial and industrial buildings."

"Jef Tyler and his pregnant wife got a notice indicating the assessed value on the townhouse they bought two years ago in San Jose's Japantown was being dropped $47,000 to $539,000. The declining value has forced them to delay their plans to trade up to a bigger home to make way for the baby."

"Although Jef Tyler expects the tax break to be small, he said it's at least a silver lining. 'I guess it's better than just saying, 'Gee, we lost $40,000 on our house.' Maybe we can get an extra tank of gas, or a half-tank.'"

The Bay Area Newsgroup. "AmeriDream Inc., a buyer assistance program...is now under fire in the U.S. Senate and the Department of Housing and Urban Development, which is proposing to get rid of the nonprofits - mainly AmeriDream and Nehemiah Corp. - that use money from the seller to pay FHA down payments or closing costs."

"Jason Ellis bought a home in Tracy with AmeriDream, after looking for more than five years. The sole breadwinner in a family of four, he said, 'There was no way we were going to be able to save 25 percent for a down payment. That would be $80,000 to $90,000 on a $300,000 house.'"

"Ellis said that his rent was rising so fast, from $1,400 to $1,800, he figured he should buy. 'Rents were really getting out of hand,' he said. 'We were at the mercy of our landlord's finances.'"

"They found one that was affordable, a four-bedroom house just under 2,000 square feet for $300,000. Ellis was able to put 3 percent down by liquidating his 401k, and used AmeriDream to pay 3 percent towards closing costs."

"A few years ago Ellis said he was approved for a $750,000 house, an amount he said he could never afford. 'The minimum payment was more than I made a month before taxes,' he said."

"Other loan agents promised up to $100,000 in cash-back financing. 'We could have gone with a couple of brokers a few years ago who promised us the big dream but we would probably be in default right now,' Hamilton said."

The Recordnet. "William McClamy, with a family of 10 that includes a grandchild, is in a world of hurt and frustration as he has wrestled futilely to get a home mortgage loan modified so he and his family can stay in their Tracy home."

'He contacted the lender, Countrywide, when his adjustable-rate mortgage payment was about to jump $1,200 a month to $4,100 and was told the company couldn't help, because he wasn't behind on payments yet."

"Seven months ago, he was in trouble and couldn't make full payments and was passed from one Countrywide staffer to another to another. Still, nothing happened, he said. 'We're in limbo,' he said. 'We're looking at foreclosure at any time now. They ignored us. They don't care.'"

The St Helena Star. "At 55 percent, Napa County has suffered the sharpest decline in home prices among nine Bay Area counties. Notice of Trustee sales for the county rocketed to 359 in 2007 - three times what they were a year earlier, and five times what they were in 2000."

"The 704 Notices of Default issued last year more than doubled the number issued in 2006 and were more than three times the total for the year 2000. So far this year, the numbers in both cases are on track to far exceed ‘07 totals."

"To the south, both Napa and American Canyon are reeling. Stan Brody of Burlingame-based U.S. Mortgage Corporation, talked about a Web site he accessed listing 18 'comps' in American Canyon."

"'They were all new homes built from 2002 on,' he said. 'Among them were three sales, 10 were bank-owned, the others were short sales.'"

"Just over the Lake County line to the north, a Hidden Valley Lake real estate broker's ad states that out of 134 homes listed for sale, 42 are below $250,000, 28 are foreclosures and 15 are short sales."

"No place has been more affected than San Joaquin County, said Brody, where 1,600 homes have been foreclosed upon and 22,000 are in one stage or another of default. 'In Stockton, we closed escrow for $197,000 on a property that sold previously for $550,000,' he added."

"Still, the Upper Valley is not totally immune from the effects of the massive downturn. 'Any kind of a decline is a shock to sellers here,' added Skip Lane of Town and Country Real Estate. 'They just assume that prices will go up and they haven't in the past year or so.'"

"Home sales in the Upvalley are affected by stock market fluctuations, said Brody. 'Well, guess what. The stock market has this whole fear thing going, too,' he said."

"Brody believes that modifications by lending institutions providing some form of mortgage relief may ultimately be the only way out of the real estate mess."

"'Right now, you have Senator (Christopher J.) Dodd who wants to put out $200 million for foreclosure counseling,' Brody added. 'My question is, what are you going to counsel these people on? How to pack boxes so they can move out for the foreclosure sale?'"

New Times SLO. "Like a series of beached whales, each more decayed and skeletal than the one before, the buildings line the hillside behind Broad Street in SLO. Torn plastic building wrap flaps in the breeze and an incomplete wire fence dissuades, but does not prevent, would-be trespassers from exploring the buildings."

"City documents show the project on Rockview Place, which began in 2005, was envisioned as nine condos that would fetch as much as $6 million when sold."

"But running into foundation problems, among other concerns, work on the steep hillside project was stop-and-go for most of its history and for the past year work has entirely ceased. Now it's been formally declared 'abandoned' by city planners."

"'We've asked that he put in fencing and that he keep a daily log showing that he's at the site and that he's keeping the vagrants out,' said Tim Girvin, SLO's chief building official. 'You've got an unprotected structure there; you don't want people coming in and setting fires to warm themselves, or doing something else that results in the place burning down.'"

"For now, Girvin said, the developer has been responding to most city requests, but has emphasized that no significant work can happen until he gets new funding."

"'The problem is, it's trying to get blood out of a turnip,' Girvin said. 'How can you put these financial requirements out on a project where the guy's got no money to move forward?'"

"So for now, he said, while the city could legally seek to have the project razed, instead officials are waiting for the results of...court actions. 'We're kind of treading water,' Girvin acknowledged."

The Daily Bulletin. "It's a buyer's market out there. Real estate agent Javier Sanchez has had a 1,400-square-foot Montclair home on the market for just a week, and already he has had several offers."

"Sanchez said the owner of the house, a short-sale, had enough equity in the home to lower the price to $245,000, but he's going to walk away with nothing. Sanchez said he's seen a lot of changes in the market, with people struggling to pay their mortgages."

"'Most people are are pulling the equity from their home to make those payments but in the end they can barely afford it,' he said."

"Sanchez said there are 120 houses within a two-mile radius of the Camarena property with owners who are 90 days behind on their mortgage payments. There are 17 other houses with mortgages that are 120 days past due and will be repossessed within the next 30 days."

"In the past 12 months, Sanchez said, 102 homes have been repossessed within two miles of the home."

"'(The former homeowners') mortgages were too high, they got tied up in the middle of the sub-prime loans, and they just didn't have their equity to fall (back) on,' he said."

"The glut of short-sale and foreclosed homes is making this the ideal time to buy, some experts say. For those looking to unload property, a little patience is probably in order."

"'Those who are trying to sell their home with equity can't because there are already too many homes in the market,' Sanchez said. 'My advice to them is stay in their home until the market gets better.'"

The Press Enterprise. "A Beverly Hills home builder has purchased 163 finished residential lots in Victorville...from Pulte Homes Inc, in hopes that the High Desert residential market will rebound during the next few years."

"Similar land sales have become common in the High Desert recently, according to one home builder familiar with the market. Rollie Heschong, founder and president of High Desert Homes in Joshua Tree, said lack of business caused him last fall to shut down the company temporarily."

"'In a year or two I think High Desert might come back, but for now the 'spec' housing market up here has dried up,' said Heschong, who now builds custom homes."

"Kennedy Wilson Residential plans to develop their new lots after the housing market turns around or sell them to another home builder if the market is still stagnant three years from now, said managing director Eric Taylor."

"Cost of the land, in the Cypress Pointe community about a half-mile from Interstate 15, was not disclosed."

The Berkeley Daily Planet. "Berkeley City Council members seem to think that there's an infinite demand for brand new condo bunkers, despite numerous warnings over the years about the housing bubble."

"New condos seem to have hit a wall. Two massive projects opened around the beginning of this year, both on 'transit corridors.' During construction, a large sign announced that 1801 Shattuck would be condominiums. The website still boasts that it will be 'the first major Condo development in the Gourmet Ghetto in over a decade.'"

"The project opened without fanfare in early spring-as rentals. The apartments are being advertised with great enthusiasm: '1 Month FREE-HURRY-Rent Special! Hurry Ends Sunday!' (This ad has been running for weeks, so I surmise that the special offer expires on Sunday and is revived on Monday)."

"The project at 2700 San Pablo is another story. Newspaper ads for the condos began in December 2007 with a catchy new project name.When I attended an open house tour, only two units seemed to be complete."

"In late February 2008, mechanics' liens against the property began appearing at the Alameda County Recorder's Office, eventually totaling 49 liens filed. The amount still owed to contractors is approximately $1,036,468."

"The two completed units at 2700 San Pablo, 210 and 406, were advertised vigorously until early May, when advertising ceased. Number of condominium sales recorded: Zero. On June 2 a Notice of Default was filed at the Recorder's Office. The construction loan of approximately $9.5 million appears to be in arrears."

"Why are the councilmembers so condo-crazed? All I can figure is that they are following their leader, Mayor Bates, whose campaign contributors include a long list of developers (and their wives and employees). It is rumored that the only job Bates has ever held other than politician was-commercial real estate broker."