After a months-long struggle to move through the city's planning department and overcome objections by wetlands advocates, Ashwood Preserve is up for sale.

The 9.52-acre parcel, which became a test case for a provision which allows a land owner to build on property even if it is mostly covered by natural features, has been stymied by a building industry that was quiet all year.

"The market is nervous and builders are stepping back," said Lee Eckroth, a Corvallis real estate agent who is working to get the property sold. "Ultimately though, a good property always has a market for it."

It's representative of the plight of Corvallis builders, who never really got off the ground in 2008.

Residential building ground almost to a halt in 2008, echoing national troubles in the building industry. Just 44 permits for new residential building have been issued this year, half the number approved in 2007.

All told, the total value of construction in Corvallis in 2008 was down 30 percent from 2007 figures, which themselves were off by 35 percent compared to 2006.

John Faulconer, a mid-valley builder for 10 years, hung up his tool belt this year and now sells existing real estate full time.

He's still keeping his construction company open with hopes to return to building in the future, but for now, the market isn't anywhere near where it used to be.

"I just sold my own home for $550,000," he said. "A year and a half ago I could have gotten $750,000. It makes me sick."

Both smaller builders like Faulconer and major development companies felt the pinch of a tight credit market and housing slowdown. At the end of last year, Legend Homes in Corvallis was upbeat about its prospects here. In June, the company filed for Chapter 11 bankruptcy protection when creditors came calling.

The Oregon company's Corvallis projects - Stoneybrook and Willamette Landing, both offering new homes priced between $250,000 and $400,000 - had been largely completed before the troubles in the housing market, although a handful of finished houses remained in Stoneybrook.

Another project brokered by Legend, Witham Oaks, a 221-lot development north of Harrison Boulevard and south of Witham Hill Drive, remains in the same limbo that stalled Ashwood Preserve.

The construction downturn took a toll on the city as well. The Community Development Department announced layoffs in early December.

A plans examiner and a building inspector were cut from the department. Also, two positions that are already vacant will not be filled, and two employees on a leave of absence won't be rehired if conditions remain the same next summer.

One of the unfilled positions is a new project-manager position, approved by the City Council in May and designed to help shepherd large or difficult projects through the planning and permitting process. The job is slated to earn as much as $67,000 per year.

The department is primarily funded by building-permit fees for new construction and remodeling.

Eckroth and Faulconer are cautiously optimistic about the coming year. Both are confident that Benton County's historically stable real estate market will even out sooner than later.

"I'm here for the long haul," Faulconer said. "This is a slow-growth area. Granted things are slow, but things are still going to be consistent."

Matt Neznanski can be reached at 758-9518 or matt.neznanski@lee.net.