For years, homebuilders kept up with pent-up demand for housing by constructing units at breakneck speed. Now many of those homes sit empty, while property owners turn to gimmicks to shed the real estate.

Welcome to the new paradigm of residential real estate: Yesterday's feast is today's leftovers.

"It's clear that we built too many homes," said Bernard Markstein, senior economist and director of foreclosures at the National Association of Home Builders in Washington, D.C. "The market is working down an excess of inventory. "

The national real estate market had 8.1 months of supply in February, up from about 6 months in December. The current level of supply is well above the market's heyday, when 4 months of supply was the norm, according to the NAHB.

That's led homebuilders to offer incentives. According to the NAHB, three-quarters of builders are enticing buyers with everything from paying for closing costs to pumping extra features into the home at no cost. Some have gone as far as to offer a $10,000 Lowe's gift card.

"That's for the home closer to $500,000," Markstein said. "Still, that's not something we would have seen a few years ago. "

In total, 541,000 new units are for sale, 179,000 of which are completed and sitting unoccupied.

That compares to 310,000 for sale in December 2001, 377,000 at the end of 2003 and 431,000 at the close of 2004.

"The key to offering add-ons, like helping pay down points on a mortgage, is that the builders don't have to lower the price," Markstein said. "That's something they absolutely do not want to do. "

The slower market has also eliminated speculators from buying homes and turning the properties around for quick profit. That market has dried up, said Walter Molony, a spokesman for the National Association of Realtors.

"Most of the flippers made out well," Molony said. "The impact there is behind us. It's a pure guess as to how many flippers are in the market, but we do know there's some excess in the inventory. "

One telling sign: in 2005, 40 percent of sales nationwide were of second homes. That fell to 30 percent in 2006 - and flippers are included here, though Molony said he had "no idea how much of a factor they were.

"The 30 percent statistic is much closer to average," he added.

The market could be tempered by the subprime lending market, which continues to reel from a recent spate of delinquent payers. To move more people into homes they could barely afford, mortgage originators reached new creative heights, leading to a rapid increase in risky loans. In 2006, 13.5 percent of all mortgages were subprime, according to the Mortgage Bankers Association. That's well above the 2.6 percent level in 2000.

It should come as no surprise that the gamble failed to pay off, as 3.5 percent of subprime mortgages go into foreclosure, according to a study issued by the University of North Carolina's Kenan-Flagler business school.

"So far the subprime lending problems have created pressure, but that's it," Markstein said. "If, however, lenders tighten requirements in the prime market, there could be a problem. "

That's what concerns Dottie Herman, chief executive of Prudential Douglas Elliman Real Estate in Melville, N.Y.

"There were some abuses in the subprime market," Herman said. "If the pendulum swings the other way, and lenders go from being too loose to too tight, the market could end up feeling some pain. "

As for the greater economy, the subprime slowdown is already taking its toll. Bank and mortgage company shares have taken a beating and analysts predict the real estate market could be next - especially if foreclosures continue to mount.

A UCLA-Anderson Forecast, released earlier this week, projects a drop of 5 to 10 percent in home prices. The survey claims the subprime collapse will lead to a second wave of a slowdown in the housing market. Housing woes are expected to take a full percentage point out of U.S. economic growth this year, according to the study.

The analysts added the market jitters could lead to a cut in the Fed funds rate, which could be the best news the market's heard in quite some time.