The Boston Herald reports from Massachusetts. "Call it the return of the $100,000 home. Real estate observers are seeing a spike in the number of single-family houses and condominiums available in certain areas of the state for $100,000 or less. Real estate agents say they're seeing some eye-popping retro-like prices for some homes and condos in lower-income areas, often sold off by banks at bargain-basement deals just to get them off their books."

"Gregory Burton said he recently sold a Dorchester two-bedroom condo on Jacob Street, just outside Codman Square, for $55,000. The same condo sold for about $179,000 three years ago."

"A similar apartment in the same building was on the market this spring at $129,000 - and sold late last month for $50,000, according to listings."

"Adam Day, an agent in Watertown, said he recently sold a newly renovated three-bedroom condo in Chelsea, originally listed at about $200,000, for only $152,000. 'I do see the $200,000 barrier cracked more,' said Day."

"Boston workers were bracing yesterday for hundreds of job losses as the financial world reeled from the bankruptcy filing of Lehman Brothers and the planned $50 billion takeover of Merrill Lynch by Bank of America."

"Merrill Lynch and Bank of America spokesmen said yesterday there would be some Boston job- and real estate-holdings cuts where overlaps occur, but declined to give specifics. Both companies have significant wealth-management businesses in Boston."

"In Greater Boston alone, Merrill has 11 branches in mostly affluent towns, employing hundreds of workers."

The Boston Globe. "'No one ever thought they'd see a day like this,' said Michael A. Greeley, managing general partner at IDG Ventures in Boston, who worked on Wall Street early in his career. 'To think that two of our largest investment banks are now history is unfathomable.'"

"'When the dust settles, there are going to be some people let go,' said Scott M. Black, president of Boston investment firm Delphi Management Inc. 'The real impact will be a shrinkage in available credit. Borrowing rates for individuals and corporations are going up.'"

"'This contagion continues to spread,' said Peter Falvey, cofounder of a Boston investment bank that had a deal-sharing arrangement with Lehman. Falvey said he didn't expect his company would be financially hurt by Lehman's demise but was more concerned about the overall financial environment. 'We can't see the bottom right now,' he said. 'That's the most worrisome thing.'"

USA Today on Massachusetts. "'It's like a multiple-car accident on the highway - just a collision of things,' says Robert Forrant, a professor at the University of Massachusetts-Lowell. 'There's disappearing jobs over a long period of time, then the home foreclosure crisis and obviously high energy costs. All of that has made people feel a great deal of economic anxiety.'"

"Roger Nascimento, owner of a small house-painting business may close off the second floor of his home and move his family downstairs this winter to save on heating costs."

"'People are getting laid off because businesses are closing down, and I've got two friends who are losing their houses,' Roberts says. The town has one of the highest foreclosure rates in the state. Even tips are down as locals count their pennies. 'The banks are nervous, and people are scared.'"

The Providence Journal from Rhode Island. "Many of the problems vexing financial markets relate to the run-up in housing prices earlier in the decade, said Willis H. Riccio, a Providence lawyer and former regulator with the U.S. Securities and Exchange Commission."

"In essence, lenders made mortgage loans to people who could not afford them. These loans, in turn, were put together as packages and sold as investments. In time, the system began to unravel."

"'This crisis was borne of a simple excess of greed and speculation in one sector - real estate - by borrowers, lenders and financial middlemen,' said Robert E. Cusack, chief investment officer at a money management firm in Providence. 'Now that the collateral for all this borrowing has fallen in value, the stresses are enough to break those with enough exposure to it. Since this is as much a crisis of confidence as it is of money, there are no buyers of mortgage-backed paper in the markets. This makes things worse.'"

"Because lenders are tightening their standards, and for other reasons, 'there's just less liquidity in the marketplace,' said Jordan E. Goodman, former Wall Street correspondent for Money magazine who was raised in Cranston. 'It's already hard to get a mortgage. It's about to get harder. It's already hard to get small-business loans. It's going to get harder.'"

The New Haven Register on Connecticut. "Wall Street may be in New York City, but the descent of the mammoth investment firm Lehman Brothers Holdings Inc. into Chapter 11 bankruptcy protection Monday, along with Bank of America's acquisition of the Merrill Lynch & Co. investment bank, will be felt in Connecticut, experts say."

"The state's Fairfield County area is linked to Metropolitan New York, with many of its residents commuting into the Big Apple to work. Due to layoffs, primarily in the financial sector, approximately 36,000 to 40,000 jobs have been lost, said Donald Klepper-Smith, chief economist at DataCore Partners LLC in New Haven and economic adviser to Gov. M. Jodi Rell."

"'Institutions must be allowed to fail in order for capitalism to survive,' said Paul Schatz, a wealth manager in Woodbridge. 'Certainly, this is the continuation of the lesson we should all learn from the housing crisis: There's no free lunch.'"

From The Day in Connecticut. "Financial experts said the difference between then and now is that people who invested in Internet firms knew they were taking a risk, whereas today's unpleasantness has spilled over to people who thought they were making conservative investments."

"Glenn Hamler, a financial adviser in New London, said he heard of one local investor whose $800,000 investment in Lehman Brothers now may well be worthless. Others, according to economists, have had to delay retirement because of sudden losses of 20 to 30 percent in their 401(k) plans."

"'It's a cruel animal, capitalism,' Hamler said. 'When things change in the market, there are no prisoners.'"

"'The market is brutally punishing bad decisions over time,' added Middleton."

"Bill Middleton, an investment adviser in Mystic, said the current crisis can be looked at as similar to periods in which other industries - notably Internet firms in the late 1990s and biotech operations in the '80s - experienced overcapacity."

"'There were too many banks chasing too few dollars,' Middleton said. 'When we got rid of excess capacity in Internet companies, we didn't look at it as a social crisis. But for people in the Internet business that was a pretty unpleasant time.'"

The Times Union from New York. "As has been widely noted, it was the easy availability of mortgages that contributed to rising numbers of foreclosures and a roiling of Wall Street."

"But Lawrence Yun, the chief economist for the National Association of Realtors, said the foreclosure crisis has been hyped, pointing out that only one of every 100 American households has been foreclosed upon. 'It's very high from a historical point of view, but it's not as if people are falling apart right and left,' he said. 'It's important to put that in perspective.'"

"In fact, Yun said he sees the housing market, both nationally and in New York, as 'out of whack.'"

"Mortgage rates are very low and the federal government has just launched a $7,500 tax credit designed to spur home purchases. Yet even in places with rapid job growth -- such as in Indianapolis or Texas metropolitan areas -- homes sales are lagging."

"The reason for that gap, in Yun's view, is eroding consumer confidence largely caused by negativity, both in the media and elsewhere, about the market. Yun, by contrast, is more optimistic, believing the housing slump is nearly over."

"'The winter months are always weaker (for home sales), but this winter will be better than last winter,' he said. 'There is this great pent-up demand that cannot be held back any further.'"

"Events of the last few days might make such economic optimism seem far-fetched. And even Federal Reserve Chairman Ben Bernanke has predicted continuing housing market weakness. Yun, in fact, on Monday rebuked Bernanke for such predictions, saying if it's inappropriate to forecast stock or oil prices, 'it is inappropriate to comment on home prices, because people react to that.'"

"To applause from his Realtor audience, Yun said he had made that point in a letter to Bernanke. And he rued that former Fed Chairman Alan Greenspan is also issuing more negative housing market predictions."

"'But there's little that can be done about that,' Yun said."

The Post Standard from New York. "The law shows up with one hand on their holstered pistols. Two Onondaga County sheriff's deputies bring a hard reality. The inhabitants of 4692 Beef St., in Onondaga, can't live here anymore."

"'Sheriff! Anyone here?' shouts Sgt. Bob Burns as he slides open an unlocked door after his knock goes unanswered."

"The former owners of the home, Andrew and Roxanna Crysler, hadn't made a mortgage payment in 17 months, according to court records. The lending company that held the mortgage, GMAC Mortgage LLC, exhausted its efforts in court to get its money. GMAC persuaded a judge to issue an order in April to have deputies evict the Cryslers and their possessions."

"The empty home was the deputies' second eviction in a week. Two days earlier, they went through the same routine at a $500,000 home in Clay. In both cases, the residents had moved out in advance of the deputies."

"'They never talked about it,' neighbor Marie Temara said of the Cryslers. 'They just left.'"

The Star Ledger from New Jersey. "Much has been written about how easy credit fueled a housing bubble. Six years ago, owning a home -- the American Dream -- seemed to be in everyone's reach. And not just owning one home, but several. Don't have the cash to put 20 percent down? No problem. The rules went out the window. Money was lent freely."

"People who could never afford a home suddenly could. And people who could afford a $250,000 Cape Cod were lent enough to buy $500,000 McMansions."

"Here are some of the factors experts said led to the debacle. Alan Greenspan, former Federal Reserve chairman, has been taking the heat for driving interest rates so low after the internet bubble and 9/11 terrorist attacks led to a mild recession."

"'With the benefit of hindsight, it does look like interest rates were too low for too long, and it does look like it contributed to the housing bubble,' said Robert Dye, senior economist for the PNC Financial Services Group. 'But that wasn't the only thing. The risk in the mortgage industry became a hot potato -- it was passed on and passed on.'"

"'We had a home ownership rate that went from 40 percent in the Great Depression to approaching 70 percent a year or so ago,' Dye said. 'The big lesson we learned is that simply is too high.'"

"'I have a theory -- it's called the marginal moron theory -- which says that wrong people get into the markets for the wrong reasons at the wrong times,' said Scott Rothbort, a finance professor at Seton Hall University. 'You had people who all of a sudden thought the housing market was an open casino -- no money down.'"

The Asbury Park Press from New Jersey. "The meltdown on Wall Street capped a tumultuous 24 hours. During the one-day sell-off, about $700 billion evaporated from retirement plans, government pension funds and other investment portfolios."

"The uncertainty can be traced to the housing market's collapse. Lenders, emboldened by soaring home prices earlier in the decade, loosened their underwriting standards and approved home loans to consumers who couldn't afford them. They then bundled the loans and sold them to investors worldwide, experts said."

"'"I think what we are witnessing is the end of the phase in which (easy) debt was made available,' said Patrick J. O'Keefe, former CEO of the New Jersey Builders Association. 'What America is going to have to come to grips with is our addition to debt is at an end.'"

"Meanwhile, the state's housing market continues to be weighed down by rising foreclosures, falling home prices and stricter credit standards, said Joan Martinez, a mortgage loan officer in Berkeley."

"'It's very difficult to get a mortgage these days,' she said. 'This is the worst I've ever seen it.'"

"Harold Olsen, 72, of Tinton Falls, has been unable to sell his home, despite lowering the price almost 25 percent. 'Everybody is up against the same situation,' he said."

"Olsen moved into his home in 2001 and put it on the market two years ago, asking $680,000. He has lowered the price to $520,000. But still, no one has come close to the price; one recent buyer offered $390,000."

"'I'm going to be a little above breaking even - if I sell it at this price,' Olsen said."