House Hunting in ... Vancouver

Farah Nosh for The New York Times

Bright open loft space in Vancouver.

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A One-Bedroom in Gastown

 

$998,000

The apartment is in on the seventh floor of the Alexis building, a former industrial building converted to apartments in 1997. Renovated in 2006, it is equipped with a built-in audiovisual system.

The layout is circular, with the entryway giving onto the kitchen and the bedroom, both of which also open into the living and dining space. The space has an open plan, with floor-to-ceiling windows overlooking a waterfront park that faces Vancouver Harbor, the Lions Gate Bridge and the North Shore Mountains.

Interior doors are sliding panels of frosted glass, which let light through even when closed for privacy. The dining room has a built-in gas fireplace, and under-floor heating runs throughout.

Over all, the space is designed for minimal clutter, with discreet storage behind wood or glass panels in the living room, kitchen, dining room and bedroom.

The kitchen stovetop has two gas burners and four electric ones. Upper cabinets are faced with frosted glass and framed in steel; they open vertically on hinges. The lower cabinets are lacquered in an aquamarine color, in keeping with the theme throughout of aquamarine, ivory and brown.

In the master bath, two round sinks with gooseneck faucets and automatic taps face each other on either side of a mirror. The room also has a steam shower and a glass tile mosaic. In the bedroom, a built-in blonde wood bed, side table and desk are included in the sale price.

Gastown, a former industrial area, has become a cultural center, with brick and cobblestone streets, restaurants and shops. Vancouver has abundant opportunities for activities like skiing, sailing and golf. The Vancouver International Airport is half an hour from the apartment on the city’s rapid transit system, which was built for the 2010 winter Olympics.

MARKET OVERVIEW

“We’ve noticed a dip in the demand for downtown condos,” said Andrew Carros, a real estate agent with Sotheby’s International Realty Canada’s Vancouver office, “but it’s a slight correction rather than a downturn.” Mr. Carros theorizes that Vancouver is protected from the worst price fluctuations by geography. It is surrounded by water, mountains, the United States border, and a valley. For that reason, he pointed out, “there’s nowhere for Vancouver to go except up.” The apartment featured here is a good example: the building’s developers combined two old buildings and added four stories on top of them.

Apartment prices in downtown Vancouver average about 800 Canadian dollars per square foot ($752 per square foot, at $0.94 to the Canadian dollar), according to Mr. Carros, but the most exclusive apartments, in the Coal Harbor neighborhood, can go for 2,000 to 2,500 Canadian dollars per square foot. In the Kitsilano and Dunbar neighborhoods, lower-end homes that need work can run 1.1 million Canadian dollars; larger new houses with views can cost up to 4 million.

Although volume has dropped in the Vancouver area in the past year, prices have risen to prerecession levels. Jake Moldowan, the president of the Real Estate Board of Greater Vancouver, said 7.1 percent fewer apartments and 10.4 percent fewer houses sold this May than in May 2009. Yet figures for June show an 18 percent increase in the average price of houses and an 11 percent increase in the price of apartments over the same period.

WHO BUYS IN VANCOUVER

Historically, the United States dollar’s strength against the Canadian dollar has made Vancouver an attractive place for American second-home-buyers. Recently, however, the currencies have been closer in value, so American buyers are fewer in number, according to Mr. Carros.

There are still significant numbers of Asian buyers. “Vancouver has always had strong ties to the Asian community,” he said, adding that the area also has its share of European buyers.

Not all foreign buyers are looking for homes for their own use. “There are a lot of off-shore investors in Vancouver, people who buy rental properties,” said Derek Christiansen, a Vancouver-based mortgage broker with Home Loans Canada.

BUYING BASICS

In Canada, Mr. Christiansen said, “buyers from the United States are basically treated like local buyers.” He said people should expect to put down 20 percent unless they have a Canadian work visa, in which case they may be able to put down less. Buyers from other countries, on the other hand, will in most cases need to make a larger deposit, usually 35 percent.

The biggest transaction cost is a property transfer tax that varies by province. The taxes differ significantly depending on price and on whether the house is new. In British Columbia, all properties have a transfer tax equal to 1 percent of the first 200,000 Canadian dollars and 2 percent of the balance, Mr. Christiansen said. For the apartment featured here, the tax would be about 19,000 Canadian dollars, according to Mr. Carros.

Taxes on new homes are much higher. On July 1, British Columbia implemented a new tax called the harmonized sales tax, which will add 12 percent to the cost of such homes. The tax replaces a 5 percent sales tax; because it is so new, there is uncertainty about exactly how it will be implemented. Mr. Christiansen predicted that rebates would reduce the sting for some buyers, although rebates may not be available for second homes. Mr. Moldowan said many developers of new apartment buildings were absorbing the cost of the harmonized tax through special promotions.

Legal fees cost roughly 1,000 Canadian dollars, Mr. Christiansen said. Most buyers elect to do a home inspection, which costs 500 to 600 Canadian dollars. An appraisal costs 250 to 300, although this expense is sometimes covered by the lender.

Article Here

Two of Western Canada’s largest construction firms to merge in $391 million deal

Monday, 17 May 2010

Seacliff’s CEO Bill Crarer Richmond-headquartered Seacliff Construction Corp. (TSX:SDC) and Calgary-based Churchill Corp. (TSX:CUQ) announced Monday that they’re merging in an all-cash deal worth approximately $391 million. Under the terms of the deal, Churchill will acquire Seacliff and Seacliff’s shareholders will receive $17.14 in cash per share. The deal value represents a 23% premium to the volume-weighted average trading price over the past 20 trading days ending May 14, 2010. Both Churchill and Seacliff share similar growth-oriented strategies,” said Seacliff’s CEO Bill Crarer on the conference call announcing the deal. “We have determined that by putting these companies together, we can offer greater growth and advancement for our people, better capitalize on opportunities to secure larger projects currently beyond our capacity and broaden our reach across Canada.” Seacliff shares opened at $17.05 on Monday, 17% higher than their $14.55 per share close on Friday. The deal will combine Churchill’s Stuart Olsen Inc. with Seacliff’s Dominion Construction, the two largest entities of both firms, which will constitute approximately 75% of the combined company’s revenue. On a pro forma basis, the new Churchill will employ approximately 3,304 people, including 612 full-time salaried employees and approximately 2,692 hourly employees. Churchill is paying for the acquisition initially with cash on hand and through an underwritten $200 million equity bridge loan. However, prior to the close of the deal, which is expected in July, Churchill plans to raise approximately $200 million of equity and equity-related capital. Seacliff’s share price range during the past week: between $13.80 and $14.55; 52-week high: $15.29; 52-week low: $6.85. rchu@biv.com

 

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A detailed rendering shows views of River Green, Aspac Development Ls Ltd.'s master planned 2,600-unit residential community on the Richmond waterfront adjacent to the Olympic Oval.

Photograph by: Handout image, Aspac Developments Ltd.

RICHMOND — With the unveiling of its biggest ever single development, the City of Richmond has begun what it hopes will be a reorientation of its downtown out to the Fraser River waterfront.

On Tuesday, Aspac Developments Ltd. showed off its detailed plans for River Green, a 2,600-unit master-planned community, with its first phase of construction to start in September and the total build-out to take 10 to 15 years.

And Aspac plans to start selling that first phase, 458 luxury-oriented units in six buildings, this June, with completion expected some time in 2012.

Prices for the units, however, ranging in size from 700-square-foot, single-bedroom apartments to 3,500-square-foot waterfront homes, were not unveiled at the media preview inside the project’s $9-million presentation centre.

“It was part of the original vision when we built the [Olympic] Oval and came up with the concept for it that we would have a vibrant new neighbourhood right on the waterfront,” Richmond Mayor Malcolm Brodie said in an interview.

Aspac, the developer that built a big chunk of Vancouver’s Coal Harbour, bought most of the 11.2-hectare River Green site adjacent to the Oval, for $141 million in 2007.

Some 7.4 hectares of the property is the remainder of what was once the 219-hectare Brighouse Estates property that Richmond bought for $1.45 million in 1962.

Brodie said that the city held ownership of the remaining land “for decades,” waiting for the right opportunity to shift downtown Richmond’s focus out towards the little-used waterfront.

“We knew being home to the signature venue for the [2010 Olympics] would provide us with unparalleled opportunities to promote our city,” Brodie said, adding that the Oval “could be a catalyst for achieving our vision for our city.”

Ted Townsend, Richmond’s director of communications, said that as development in this sector of Richmond proceeds, the city will develop the old CP Rail right of way as a main north-south connector road.

And with its green roofs, cascading rainwater-fed features and green spaces, the city expects River Green to be an anchor for a linear park being developed along Richmond’s Middle Arm dike.

“The entire riverfront will be redeveloped and rebuilt,” James Cheng, Aspac’s architect for the six-building Phase 1, said.

Cheng characterized River Green as Richmond’s “first real waterfront development.”

Cheng said the design of the site, adjacent to Vancouver International Airport’s flight paths, has paid careful attention to aircraft noise, employing an acoustic engineer to help determine which buildings will need the added soundproofing of extra insulation and specialized glazing.

To address flooding concerns, Cheng said, the level of the site has been raised so that underground-parking structures will be at the level of the river and will even help reinforce the Middle Arm dike.

Aspac has obtained its development permit for the site and Townsend said the developer is in the process of working through building permits with city officials.

River Green’s master plan, and details of its first phase, were unveiled on the same day investor advisers Edward Jones came out with a report cautioning that housing prices have risen much faster than wages and employment levels warrant.

However, George Wong, principal of Magnum Projects, Aspac’s marketer for the site, said Phase 1 will be aimed at “a more mature, more financially well-heeled crowd,” and he’s confident it will sell well, perhaps selling out its 458 units within 60 days.

Long-term mortgage rates took another tick up Monday, which, along with recent tightening of mortgage qualifying rules, are expected to squeeze first-time buyers, but Wong subscribes to the view those steps won’t seriously crimp the overall market.

“All statistics are pointing to the continuation of very healthy [sales] activity levels,” Wong said.

See article here from The Vancouver Sun

Bank repossessions of homes

(REOs) hit a record high in the first quarter, with a total of 257,944 properties repossessed by lenders— an increase of 9 percent from the previous quarter and an increase of 35 percent from the first quarter of 2009, according to RealtyTrac®'s U.S. Foreclosure Market Report™ for Q1 2010.

The record number of repossessions were part of overall 7 percent increase of all foreclosure filings reported on 932,234 properties in the first quarter. Foreclosure filings increased 16 percent from the first quarter of 2009. One in every 138 U.S. housing units received a foreclosure filing during the quarter.

"Foreclosure activity in the first quarter of 2010 followed a very similar pattern to what we saw in the first quarter of 2009: a shallow trough in January and February followed by a substantial spike in March," said James J. Saccacio, chief executive officer of RealtyTrac

. "One difference, however, is that the increases were more tilted toward the final stage of foreclosure."

"This subtle shift in the numbers pushed REOs to the highest quarterly total we've ever seen in our report and may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programs and processing delays slowed down the normal foreclosure timeline."

California alone accounted for 23 percent of the nation's total foreclosure activity in the first quarter, with 216,263 properties receiving a foreclosure notice — the nation's highest foreclosure activity total.

Florida's total was second highest, with 153,540 properties receiving a foreclosure filing during the quarter, and Arizona's total was third highest, with 55,686 properties receiving a foreclosure filing during the quarter.

Despite a nearly 5 percent decrease in foreclosure activity from the previous quarter, Illinois documented the fourth highest foreclosure activity total, with 45,780 properties receiving a foreclosure filing — still a 17 percent increase from the first quarter of 2009.

A total of 45,732 Michigan properties received a foreclosure filing during the quarter, the fifth highest state total. Michigan foreclosure activity increased nearly 11 percent from the previous quarter and was up nearly 38 percent from the first quarter of 2009.

Other states with foreclosure activity totals among the nation's 10 highest were Georgia (39,911), Texas (37,354), Nevada (34,557), Ohio (33,221) and Colorado (16,023).

(Barcroft Media)

Burj Al Arab hotel

Original piece from Times on Line

So far so good: The building in Liuzhou, southern China, seconds before the planned demolition

We're still ok: The initial blast successfully breaks the building into two parts

Er... that's not looking so great: Half of the building tumbles sideways in a cloud of dust

Best laid plans: The other half of the building remains standing - but leaning precariously to the side

But disaster is narrowly averted when the demolition goes wrong.

Instead of crumbling into a contained heap of rubble, half of the building crashes sideways to the ground, narrowly averting disaster.

Even more alarmingly, the other half is left still standing - but leaning precariously to the side.

Not quite as planned: Another view catches the moment half the building goes down while the other half remains leaning

Shoppers in Liuzhou carry on, unperturbed by the dangerously leaning building

In video footage, onlookers can be heard shouting in awe as the blast is carried out.

The demolition failed due to technical reasons, the China Daily reported. Experts had intended for the building to break in to two parts - but the rest of the experiment had, clearly, gone awry.

Dec. 31 (Bloomberg) -- Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute.

“The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said.

The U.S. seized the two mortgage financiers in 2008 as the government struggled to prevent a meltdown of the financial system. The debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks grew an average of $184 billion annually from 1998 to 2008, helping fuel a bubble that drove home prices up by 107 percent between 2000 and mid-2006, according to the S&P/Case- Shiller home-price index.

The Treasury said on Dec. 24 it would provide an unlimited amount of assistance to the companies as needed for the next three years to alleviate market concern that the government lifeline for Fannie Mae and Freddie Mac, the largest source of money for U.S. home loans, could lapse or be exhausted.

Lax regulation of Fannie Mae and Freddie Mac led to the mortgage companies taking on too many risky loans, Wallison said.

“It turns out it was impossible to regulate them,” he said. “They were too powerful.” He said no one knows how much will be needed to keep the companies solvent.

From 1990 to 1999, Wallison served on the board of directors of MGIC Investment Corp., the largest U.S. mortgage insurer, including a stint on the audit committee, according to Bloomberg data and company filings.

The continued government support of Fannie Mae and Freddie Mac makes buying their debt a good investment, Wallison said.

“It was always safe to buy these notes,” he said. The U.S. government was always going to stand behind them. They’re as good as Treasury notes.”

Original here

If an administration wanted to pull a fast one on American citizens and keep a move that puts them on the hook for hundreds of billion dollars as quiet as possible while still disclosing it, when would be the best time to take that action?  How about an evening when people all across the country turn off their televisions and laptops to spend time with family and friends, celebrating an important religious holiday?  Could any President be as calculating and cold-blooded as to do something like that?

Welcome to the new transparency:

The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.

The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.

Unlimited access to bailout funds through 2012 was “necessary for preserving the continued strength and stability of the mortgage market,” the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since the 1930s.

“The timing of this executive order giving Fannie and Freddie a blank check is no coincidence,” said Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee. He said the Christmas Eve announcement was designed “to prevent the general public from taking note.”

Treasury officials couldn’t be reached for comment Friday.

Why couldn’t they be reached?  Because it was Christmas. The announcement was designed to put them out of reach, just as it was designed to keep the news out of reach from the general public.  No one can seriously argue that Treasury and the White House woke up early on Christmas Eve and suddenly discovered a reason to lift the caps on the Fannie/Freddie bailout, after all.  This had to be in the works for weeks.  However, as the Wall Street Journal also reports, the White House had a deadline for acting unilaterally:

The Treasury removed the cap on the size of available bailout funds by amending agreements it reached with the companies in September 2008, when the government seized control of the agencies under a legal process called conservatorship. The agreement allowed the Treasury to make amendments through the end of the year, without the consent of Congress. Changes made after Dec. 31 would likely involve a struggle with lawmakers over the terms.

I’m wondering when Democrats will begin complaining about the “unitary executive” during Obama’s presidency (a concept they didn’t understand in the first place).

What reason would the White House need to lift the caps, anyway?  Of the $400 billion authorized by the previous bailout, Treasury has only used $111 billion of it, almost evenly split between Fannie Mae ($60 billion) and Freddie Mac ($51 billion).  The WSJ quotes an analyst from Credit Suisse as saying that the larger lending market would find the expansion of the Treasury commitment “reassuring,” but having almost $300 billion left in a line of credit should be pretty darned reassuring on its own.   And if a larger commitment was needed, the White House could have set a new limit rather than uncap it altogether.

It looks as though Obama wants to use Fannie and Freddie as proxies for more social engineering and wants to prepare for them to take more losses as a result.  That would be the only reason to completely uncap the commitment to cover its losses.  After all, the bailout was supposed to help put the two GSAs back into the black, and at the rate they have used that bailout (assuming no improvement), we wouldn’t have to worry about exceeding caps until 2012.  I’d bet that the Obama administration retools its foreclosure prevention programs to have Fannie and Freddie buy up the paper and forgive parts of the principal on the loans, and have taxpayers eat the losses on a massive basis.

Update: Business Insider’s Joe Weisenthal asked credit analyst Edward Pinto for his analysis, and he also thinks this sets up more massive government intervention and control of the lending markets.  Pinto lists five possibilities for action, and concludes:

The above actions would preserve and strengthen the government’s involvement and control over the country’s housing finance system and make it harder to reintroduce substantial private sector involvement later on.  They would also continue distortions in the marketplace leading to who knows what unintended consequences. Finally these steps would do nothing to deleverage the housing finance system, a key step in returning it to any degree of normality.

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The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.

“We’ve already lost 81 this year,” Kanas told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They're smaller companies.” (See the accompanying video for the complete interview.)

Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank.

“Government money has propped up the very large institutions as a result of the stimulus package,” he said. “There’s really very little lifeline available for the small institutions that are suffering.”

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This comes at a time when the FDIC has established new rules on bank sales. Private equity, for instance, would have to hold double the capital of their competitors in order to buy such an institution, said Kanas.

“This will have somewhat of a chilling effect on our participation,” he said. “As a result of having to keep higher capital levels, we’ll see lower prices coming from that sector.”

Of the 81 failed banks this year, two have been successfully acquired by private equity, he said. Kanas’ private equity firm bought UnitedBank, the failed Florida-based bank, from the FDIC in May. Regulators also allowed the sale of IndyMac Bank of California earlier this year.

• Check Out World Markets & Futures Trading Now

“We are seeing more people step up and lobby bids in this situation,” he said. “We’re seeing more players mostly as a result of being attracted to the sector. I’m not so sure that will continue now that the rules have been ratchet it up.”

Meanwhile, much of the commercial realty problem resides in the regional and small community banks, said Kanas, because larger banks haven’t fueled that sector in the past.

“The market is expecting about the way we were expecting,” he said. “Unfortunately, we’re not seeing any evidence of a recovery in the real estate market in the southern Florida market,” he said.

Rest of article Here

This mess is not over yet.

Please look at the FDIC release here

WASHINGTON (AP) -- Fannie Mae is seeking nearly $11 billion in new government aid

after posting another massive quarterly loss as the taxpayer bill from the housing market bust keeps growing.

The mounting price tag for the rescue of Fannie and its goverment-sponsored sibling,

Freddie Mac, is surpassed only by insurer American International Group Inc.,

which has received $182.5 billion in financial support from the government so far.

Fannie Mae's new request for $10.7 billion from the Treasury Department will bring the total

for Fannie and Freddie to nearly $96 billion. Freddie is expected to report its quarterly results on Friday.

The two companies play a vital role in the mortgage market by purchasing loans from banks and selling them to investors.

Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.4 trillion.

That's about half of all U.S home mortgages.

With assets of that size, "it's hard for their problems to be small," said Karen Shaw Petrou,

managing partner at Federal Financial Analytics, a consulting firm that advises financial institutions.

The mortgage finance company, seized by federal regulators last September, posted a second-quarter loss

of $15.2 billion, or $2.67 per share, including $411 million in dividend payouts.

That compares with a loss of $2.6 billion, or $2.54 per share, in the year-ago period.

"We are dependent on the continued support of Treasury in order to continue operating our business,"

Fannie Mae said in a Securities and Exchange Commission filing late Thursday.

The results were driven by $18.8 billion in credit losses due to declining housing market conditions,

made worse by rising unemployment. Nearly 4 percent of the loans Fannie Mae owns or guarantees

were delinquent as of June 30, up from 1.4 percent a year earlier.

The two companies lowered their standards for borrowers during the real estate boom

and are reeling from the bust. High-risk loans, now defaulting at a record pace,

have come back to haunt the companies. Worse still, the recession is

causing formerly reliable homeowners with good credit to default.

The Obama administration is expected to unveil its plans for Fannie and Freddie early next year.

Options being considered include keeping the companies private, winding down their operations,

merging them into a federal agency or separating out their bad mortgage assets into a new company

backed by the government.

Meanwhile, the head of the federal agency that regulates Fannie and Freddie Mac, James Lockhart,

is stepping down at the end of the month. Edward DeMarco, chief operating officer of the

Federal Housing Finance Agency, was named acting director on Thursday.

DeMarco, 49, has worked at the agency since October 2006. Before that,

he worked at the Social Security Administration and the Treasury Department.

Article

Al Yoon

NEW YORK (Reuters) – The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.

Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.

"We project the next phase of the housing decline will have a far greater impact on prime borrowers," Deutsche analysts Karen Weaver and Ying Shen said in the report.

Of prime conforming loans, 41 percent will be "underwater" by the first quarter of 2011, up from 16 percent at the end of the first quarter 2009, it said. Forty-six percent of prime jumbo loans will be larger than their properties' value, up from 29 percent, it said.

"The impact of this is significant given that these markets have the largest share of the total mortgage market outstanding," the analysts said. Prime jumbo loans make up 13 percent of the total market.

Deutsche's dire assessment comes amid a bolt of evidence in recent months that point to stabilization in the U.S. housing market after three years of price drops. This week, the National Association of Realtors said pending home sales rose for a fifth straight month in June. A widely watched index released in July showed home prices in May rose for the first time since 2006.

Covering 100 U.S. metropolitan areas, Deutsche Bank in June forecast home prices would fall 14 percent through the first quarter of 2011, for a total drop of 41.7 percent.

The drop in home prices is fueling a vicious cycle of foreclosures as it eliminates homeowner equity and gives borrowers an incentive to walk away from their mortgages. The more severe the negative equity, the more likely are defaults, since many borrowers believe prices will not recover enough.

Homeowners with the riskiest mortgages taken out during the housing boom have seen the greatest erosion in equity, in part because they were "affordability products" originated at the housing peak, Deutsche said. They include subprime loans, of which 69 percent will be underwater in 2011, up from 50 percent in March, Deutsche said,

Of option adjustable-rate mortgages -- which cut payments by allowing principal balances to rise -- 89 percent will be underwater in 2011, up from 77 percent, the report said.

Regions suffering the worst negative equity are areas in California, Florida, Arizona, Nevada, Ohio, Michigan, Illinois, Wisconsin, Massachusetts and West Virginia. Las Vegas and parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added.

"For many, the home has morphed from piggy bank to albatross," the analysts said.

(Editing by Dan Grebler)

link

...

In recent years Tel Aviv’s real estate values have risen slowly and steadily. In 2003, the average price of an apartment was 896,100 shekels ($226,374); in 2008, it was 1,205,400 shekels ($304,509), according to the Central Bureau of Statistics, a government agency.

The economic downturn has slowed the market. By the middle of 2008, “the market froze,” Yoram Indik, a Tel Aviv-based real-estate broker, said. “People didn’t want to sell, buyers didn’t want to buy.”

But even though the pace of sales has slowed, housing prices are generally still on the rise. For the first quarter of 2009, the average price of an apartment was 1,283,000 shekels ($324,113) according to the Central Bureau of Statistics.

The exception to the upward trend has been larger, higher-end apartments. The average price for these homes was 2,315,400 shekels ($584,919) in 2008 and has fallen to 2,087,500 shekels ($527,346) in the first quarter of 2009, a 16.4 percent decrease from the previous quarter. “A lot of foreigners, who used to be the major buyers of real estate in Israel, stopped coming as a result of the economy,” said Jonathan Livny, a Jerusalem-based real estate lawyer who handles deals in Tel Aviv. “That’s affected the upper echelon of the real estate market.”

Certain types of homes carry a premium in Tel Aviv; high-end homes with a view of the Mediterranean start at $8,000 a square meter ($743 a square foot) and can reach $17,000 a square meter ($1,580 a square foot), said Mr. Indik. Prices for real estate in the Bauhaus style, like the apartment featured here, can be 10 to 15 percent higher, he added. (Real estate in Tel Aviv is priced in either shekels or dollars, depending on the favorability of the exchange rates, Mr. Indik said.)

WHO BUYS IN TEL AVIV

As Israel’s cultural capital, Tel Aviv attracts numerous foreign buyers, particularly Jewish people from the United States and Europe. They gravitate toward higher-end properties west of Ibn-Gabriol Street, close to the beach, said Orna Biller, owner of Platinum 121 Real Estate, a Tel Aviv-based agency. Before the economic collapse, Ms. Biller estimated that half her business came from abroad. Over the past year, that number has dwindled to 15 to 20 percent, she said...

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PropertyWire July 27, 2009

...Real estate agents in the US are reporting another increases in residential property sales, the third monthly rise in a row, giving rise to further talk of a recovery in the beleaguered property market.

The latest figures from the National Association of Realtors show that overall sales transactions increased 3.6% in June, just slightly below the year-ago level and at a quicker rate than expected.

But house prices were still down 15.4% on a year ago. The average sale price now stands at $181,000.

But the figures are injecting hope into the troubled real estate market. 'This is another hopeful sign. The housing market is healing,' said Lawrence Yun, the association's chief economist. 'The increase in existing home sales occurred in all major regions of the country,' he added.

Others agree. 'The bottoming process in the housing market is under way,' said Michelle Meyer of Barclays Capital. 'The stabilisation has been driven in part by an increase in deeply discounted foreclosed properties,' she added...

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By Lynn Thomasson

July 27 (Bloomberg) -- U.S. stocks rose, adding to the Dow Jones Industrial Average’s best two-week rally since 2000, as the biggest jump in new-home sales in eight years overshadowed disappointing results from Aetna Inc. and RadioShack Corp.

Centex Corp. rallied 9.1 percent to lead a gauge of homebuilders in the Standard & Poor’s 500 Index to an almost three-month high, and Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. also climbed. New York Times Co. surged 16 percent on speculation profits will rebound. Aetna and RadioShack lost at least 2.7 percent each.

The S&P 500 added 0.3 percent to 982.18 at 4:10 p.m. in New York, the highest level since Nov. 4. The Dow Jones Industrial Average increased 15.27 points, or 0.2 percent, to 9,108.51. The Russell 2000 Index added 0.4 percent to 550.88, the highest close since Oct. 14.

“When you’ve got a good rally, people want to jump in,” said Jonathan Vyorst, senior vice president at New York-based Paradigm Capital Management Inc., which oversees about $1.5 billion. “The potential for mediocre earnings is out there. But if there are a couple good surprises, the market will likely take off.”

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Erickson’s website can be found here.

..."Born in 1924, Erickson joined the Canadian Army in 1943 and served in India, Ceylon and Malaysia. In 1945, he became a captain in the Canadian Intelligence Corps. He graduated from Montreal's McGill University in 1950 and worked as an associate professor at the University of British Columbia from 1957 to 1963.

He first achieved international acclaim soon after for his award-winning design for Simon Fraser University in British Columbia. Later he designed many significant buildings that made up the urban landscape of Vancouver, including the Vancouver Law Courts and Robson Square and UBC's Museum of Anthropology.

Erickson's success in Vancouver soon spread around the globe. His noted designs included Roy Thomson Hall in Toronto, the Canadian Embassy in Washington, California Plaza in Los Angeles, Napp Laboratories in Cambridge, England, Kuwait Oil Sector Complex in Kuwait City and Kunlun Apartment Hotel Development in Beijing.

Architecture critic Trevor Boddy recently curated an exhibit about Vancouver that prominently featured Erickson's work, and said the distinctive stamp Erikson left on the young West Coast city would be his most enduring legacy..."

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May 12 (Bloomberg) -- Home prices in the U.S. dropped the most on record in the first quarter from a year earlier, led by California and Florida, as banks sold foreclosed properties.

The median price fell 14 percent to $169,000, the National Association of Realtors said today. Prices dropped in 134 of 152 metropolitan areas, with the deepest declines in Cape Coral and Ft. Myers, Florida, followed by San Francisco and San Jose.

Distressed sales increased transactions in 17 states from the fourth quarter as speculators and first-time buyers purchased bank-owned properties. Such homes typically sold for 20 percent less than others, the NAR said today. The inventory of previously owned homes on the market dropped to 3.7 million in March from 3.8 million a month earlier, according to NAR data. The number of new homes for sale fell to 311,000, the lowest since January 2002, according to the Commerce Department.

“There are a lot of forces pushing the market in different directions,” said Brian Bethune, economist at IHS Global Insight in Lexington, Massachusetts. “We’ve seen huge improvements in affordability, not only in prices but also in terms of mortgage rates below 5 percent, but what’s pushing down those prices is foreclosures and job losses.”

Total existing home sales fell 6.8 percent from a year earlier to a seasonally adjusted annual rate of 4.59 million units, the NAR said today. Sales were down 3.2 percent from the fourth quarter. The figures include single-family homes, condominiums and co-ops.

‘Bifurcated Market’

“We are very much in a bifurcated market with sharp differences between foreclosures and short sales on one hand, and traditional homes on the other,” Lawrence Yun, the NAR’s chief economist, said in a statement.

Some areas showed “dramatic” drops in home prices, Yun said.

“In areas with the biggest price declines, we also see much higher levels of distressed sales which are distorting the data,” he said.

The steepest price decline was in Cape Coral-Fort Myers, down 59 percent from a year ago, followed by Saginaw, Michigan, with a 54 percent drop. The next biggest decreases were Akron, Ohio, with a 48 percent decline; San Francisco, down 43 percent; and San Jose, California, with a 42 percent drop.

The largest sales gain from a year ago was in Nevada, up 117 percent; followed by California which rose 81 percent; Arizona up 50 percent; and Florida with a 25 percent increase.

Those four states accounted for the 26 highest foreclosure rates in the first quarter among U.S. cities with a population of 200,000 or more, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data.

Slowing Declines

While the quarterly drop in prices set a record, the declines slowed in each of the three months. The U.S. median home price dropped 12 percent in March compared with a year earlier, according to NAR. That was slower than the 14 percent decline in February and the 18 percent slide in January.

“I do think we have some early signs that the market overall is stabilizing,” Housing and Urban Development Secretary Shaun Donovan said today in a speech at an NAR conference in Washington. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

Bank-Owned Homes

Donovan said the government will allow first-time homebuyers to use the $8,000 tax credit approved by Congress in February as a down payment on mortgages guaranteed by the Federal Housing Administration. To qualify for the credit, purchases must be completed before Dec. 1.

U.S. banks held $26.6 billion of repossessed real estate at the end of 2008, more than double than a year earlier, according to the Federal Deposit Insurance Corp. in Washington. The banking industry lost $26.2 billion in the fourth quarter, the largest loss in FDIC records.

The average U.S. rate for a 30-year fixed mortgage was 4.84 percent last week, down from 6.05 percent a year earlier, according to mortgage buyer Freddie Mac. The rate fell to a record low of 4.78 percent last month.

On an annual basis, the fixed rate will probably average 5 percent this year and 5.3 percent in 2010, according to a forecast posted on NAR’s Web site. Last year, the rate was 6.1 percent.

Sales of existing homes likely will reach 4.97 million in 2009, up from 4.91 million last year, according to the Realtors’ forecast.

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MIAMI, May 12 (Reuters) - Miami posted big gains in home sales in the first quarter of the year in a tentative sign of recovery in a city hard hit by the recession and the U.S. housing crisis, a local realtors' group said on Tuesday.

The Realtor Association of Greater Miami and the Beaches (RAMB) said single-family home sales jumped 72 percent in the first quarter over the same period a year earlier, making it the hottest single-family home market in any major metropolitan area in the state.

Sales of existing condominiums soared 51 percent at a time when statewide sales of existing condos rose just 19 percent.

"Miami has been one of the strongest comeback markets in the state of Florida," RAMB chairman Rick Burch said in a statement, citing "rock-bottom prices" and buyers from Europe, Brazil and Venezuela among factors behind the upswing.

The median sales price for single-family homes in the Miami area was $203,700 in the first quarter, down 38 percent from the year-ago period, according to RAMB.

It said the median condo sales price was $149,000, a 47 percent drop from a year ago.

Though Burch said there were statistics "that definitely point to a market recovery" in Miami, RAMB spokeswoman Lynda Fernandez cautioned that it may be too soon to talk about a "bottoming" in the housing market.

"It's hard to determine because there's still a lot of foreclosures and short sales out there that are affecting the median sales price," said Fernandez.

"I've always heard it said that you don't know when the market has turned," she added.

Fernandez said about 38 percent of the single-family and existing condo units sold in the first quarter were believed to involve properties in foreclosure or distress sales. (Reporting by Tom Brown; Editing by James Dalgleish)

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WASHINGTON (AP) - Sales of vacation and investment homes slid 22 percent last year, a sign that tough economic conditions and tight lending requirements shut out buyers, the National Association of Realtors reported Monday.

Second home sales comprised 30 percent of the entire housing market, down from a peak of 40 percent in 2005 when financing was easier.

"The vacation home market really was driven by the availability of debt," said Daniel Alpert, managing director of Westwood Capital LLC, a New York-based investment bank. "Folks were able to pick up vacation homes with very little money down and substantial loans. Given the absence of mortgage money for primary homes, one can imagine that there's no mortgage money for vacation homes."..

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Read the study here .

The map showing the major metropolitan centers is on page 30.

NYTimes February 12

...DUBAI, United Arab Emirates — Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai’s fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.

Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city — or worse.

“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield...

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Overseas Property Mall 18 February

...Newspapers have reported that more than 3,000 cars belonging to debt-ridden expats have been abandoned in Dubai’s international airport car park. These scared, unemployed expats have taken off due to fears of ending up in a Dubai prison for their inability to pay their outstanding bills.

Notes of apology taped to car windscreens and maxed out credit cards on the car seats are all too rife at the moment. This is indeed a stark contrast to the Dubai we heard and talked so much about in the last couple of years - the land of opportunities were money was flowing freely and jobs were available 24/7.

It seems THAT Dubai is no longer a reality today with overseas buyers leaving the Emirate in droves and job cuts ruining investor’ lives.

However, even if those stories are embellished, fact is that trouble is brewing and has been in Dubai for some time now. This is clear when you hear stories such as that of Sofia, a 34-year-old Frenchwoman who moved to Dubai a year ago. She got a good paying advertising job, bought a house with a mortgage of US$300,000 and a 15-year mortgage and now she lost her job and fears the worst.

With over 90 percent of foreign workers employed in Dubai many now fear that they will be next to be sent packing. The problem for them is colossal, because once they lose their jobs they also lose their working visa and must leave the country within one month (not a lot of time to sell your property and pay back your mortgage).

Suspended Construction Work

Several projects have had to be cancelled and suspended due to developers’ lack of finance. And while the government is unwilling to clear the air about exactly how bad  the economy is in Dubai, rumours are rife and flowing.

To make matters worse, a reported new draft media law would prohibit anybody from damaging the reputation of Dubai with fines of up to about $272,000. Some report this is already having a chilling effect on reporting about the crisis.

Last month, local Dubai newspapers claimed that the Emirate was cancelling approximately 1,500 work visas daily, while citing unnamed government officials. Humaid bin Dimas, a spokesman for Dubai’s Labour Ministry, told the News York Times that he would neither confirm or deny it.

With the global economy in tatters, many believe the worst and are worried about the future.

Real estate prices have dropped by 30 percent or more over the past two or three months in some parts of the city.

Some analysts also speculate that the current crisis will affect the UAE’s seven other Emirates, where Dubai has long played the rebellious younger brother to oil-rich and more conservative Abu Dhabi.

Previously seen as a refuge by expats, Dubai is no longer seen as the shiny real estate knight. Some nasty rumors spread quickly: the New York Times recently reported that the Palm Jumeirah, an artificial island that is one of this city’s trademark developments, is said to be sinking, and when you turn the faucets in the hotels built atop it, only cockroaches come out.

With the global economy in tatters, many believe the worst and are worried about the future.

Real estate prices have dropped by 30 percent or more over the past two or three months in some parts of the city.

Some analysts also speculate that the current crisis will affect the UAE’s seven other Emirates, where Dubai has long played the rebellious younger brother to oil-rich and more conservative Abu Dhabi.

Previously seen as a refuge by expats, Dubai is no longer seen as the shiny real estate knight. Some nasty rumors spread quickly: the New York Times recently reported that the Palm Jumeirah, an artificial island that is one of this city’s trademark developments, is said to be sinking, and when you turn the faucets in the hotels built atop it, only cockroaches come out.

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New home construction falls to annual rate of 466,000 units in January, record low

Martin Crutsinger, AP Economics Writer

Wednesday February 18, 2009, 12:19 pm EST

The Obama administration, seeking to combat the most serious housing downturn in generations, on Wednesday unveiled an effort to deal with mortgage foreclosures to go along with housing support included in the $787 billion economic stimulus program. But analysts said they still do not expect a turnaround in housing until late this year at the earliest.

The administration's new foreclosure relief plan will spend $75 billion in an effort to prevent up to 9 million Americans from losing their homes. The plan also will double the size of the lifeline the government is providing Fannie Mae and Freddie Macto $200 billion each as a way of reassuring financial markets of the viability of both mortgage finance giants.

The Commerce Department reported Wednesday that construction of new homes and apartments dropped 16.8 percent last month to a seasonally adjusted annual rate of 466,000 units. That's well below the 530,000 units economists expected, and was the slowest pace on records dating back a half-century.

Applications for building permits, considered a good barometer of future activity, also dropped to a record low, falling 4.8 percent to a rate of 521,000 units, slightly below economists' expectations.

"Conditions in the market for new homes have not been this bad since the 1930s and they continue to worsen," said Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., who predicted that housing starts would remain depressed for months to come.

Builders are slashing home construction as skyrocketing home foreclosures dump more empty properties on an already glutted market. The reduction in new projects should aid the housing market in the long run as fewer properties for sale help increase competition and stabilize prices for those left on the market.

David Crowe, chief economist for the National Association of Home Builders, said the administration's foreclosure program plus help for first-time home buyers included in the stimulus measure would have an impact, but the new programs will take time to become operational. For that reason, he also expects housing construction will continue to decline in the months ahead.

"I do think we will see a bottom in 2009 and by the end of this year we will start to see the beginning of a recovery. But it will be a slow recovery because of the significant overhang of empty houses for sale," Crowe said.

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By Peter Allen, The Daily Mail
18th February 2009

A Russian billionaire is desperately trying to claw back his £39million deposit after a deal to buy the most expensive house in the world fell through. Mikhail Prokhmorov - who is Russia's richest an and is worth £9.8billion - offered £500million to buy Villa Leopolda on the French Riviera last August.But since then the 48-year-old metal tycoon has lost billions thanks to the international financial crisis.

  

Mikhail Prokhorov is trying to get back the £39million deposit he put down on the world's most expensive house (pictured)

 

Mr Prokhorov had offered £500million to buy the 22-acre Villa Leopolda estate on the French Riviera

He has accordingly decided not to buy the 22-acre estate, which was once a playground to jetsetters including Frank Sinatra and is so big it requires 50 full-time gardeners to care for its 1,200 olive, orange, lemon and cypress trees.

But she has refused his request, telling estate agents: ‘The deal was agreed in  principle, and the money is owed to me.’

Billionaire: Mikhail Prokhorov wants his £39million deposit back

Strict French conveyancing laws may now lead to the case going to court, with legal fees on both sides spiralling into millions.

‘Lily is adamant that she’s not handing the deposit back,’ said a source close to the deal.

‘Mr Prokhorov, in turn, claims that property prices have collapsed since August, and the figures originally discussed were unreasonable.

‘He wants out, and he wants his money back.’

The case comes as dozens of super-rich Russians begin to sell up in the south of  France, an area once considered their favourite playground along with London.

Roman Abramovich, owner of Chelsea Football Club, is said to be trying to sell his own villa in Cap d’Antibes.

But it is the Villa Leopolda saga which is currently making headlines on the Riviera.

Nice Matin newspaper today reports that Mr Prokhorov had an offer of £500million accepted for the villa, built in 1902 for Belgian King Leopold II near Cap Ferrat, between Nice and Monaco.

But the Russian's investment vehicle, Onexim Holdings, lost £5billion this year in the banking crisis.

Mr Prokhorov's spokesman has denied the report, insisting his boss would not do business in France until the authorities apologise for arresting him in a prostitution probe two years ago in the ski resort of Courchevel.

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...Rep. Paul Kanjorski of Pennsylvania explains what former Treasury Secretary Paulson and Fed Chairman Bernanke told congress during the September 2008 closed door session. During the first third of the video an enraged caller is ranting to Rep. Kanjorski about how wasteful the first $700 billion bailout was. The best part is 2 minutes and 15 seconds into the tape where Rep. Kanjorski reveals what Paulson and Bernanke told congress that shocked them into supporting the first $700 billion bailout.

On Thursday Sept 15, 2008 at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two. Money was being removed electronically.

The Treasury tried to help, opened their window and pumped in $150 Billion but quickly realized they could not stem the tide. We were having an electronic run on the banks. So they decided to closed down the accounts.

Had they not closed down the accounts they estimated that by 2 PM that afternoon. Within 3 hours. $5.5 Trillion would have been withdrawn and the entire economy of the United States would have collapsed, and within 24 hours the world economy would have collapsed.



Kanjorski also explains why Paulson spent the bailout money differently than he originally proposed.

Some other gems from the recording:

It would have been the end of our economic and political system.

We would have had to spend 3 to 4 Trillion dollars to buy up all the toxic assets. But we didn't have that much we only had 700 Billion.

Without a banking system you don't have an economy.

We are no better off now than we were three months ago.

Someone threw us in the middle of the Atlantic ocean without a life raft. We are trying to determine which is the closest shore and whether there is any chance in the world to swim that far. We don't know...

http://www.infowars.com/rep-kanjorski-550-billion-

...

US banks are having trouble handling a surge of mortgage applications spurred by dramatically lower interest rates, after record loan defaults and thousands of job cuts have stretched mortgage industry resources to the limit.

Applications for home loans more than doubled in the two weeks after the Federal Reserve said it would buy mortgage bonds to help stabilise the market, prompting mortgage rates to fall by more than three-quarters of a percentage point....

...

With average rates for a 30-year, fixed-rate mortgage now at about 5.2 per cent, growing numbers of borrowers have an incentive to refinance to bring down their mortgage costs.

But tighter underwriting standards for prospective borrowers, combined with funding and staffing difficulties for mortgage originators, are likely to restrict the supply of new mortgages.

“The mortgage industry is collectively unprepared to deal with a cascade of business; staffs were pared to the bone as the market for mortgages shrank over the past year,” analysts at HSH Associates wrote in a note to clients..

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...The concept of corporate evil is  embedded in the bones of our culture; it is now taken for granted that markets and capitalism are flawed in practice and must be regulated and controlled, if not destroyed. Even in 1960, in the deep freeze of the Cold War with communism and the Soviet Union, Ian Fleming’s Dr No has James Bond taken captive on a Caribbean island. No statist Fidelistas on this island. As Bond enters the underground lair of Doctor No, he stops dead in his tracks: “It was the sort of reception room the largest American corporations have on the President’s floor in their New York skyscrapers.” Economics is like the movies. It’s filled with papers, text books and arcane treatises referencing  market failure, the general idea being that unfettered capitalism inevitably generates unwanted outcomes and, in some cases, total disaster. It’s a core Marxist theme, a staple of Keynesian economics, that permeates the work and thought of just about every economic school of the ideological spectrum.
From major league economists to top rank demagogues, the message from the current economic crisis is clear. “It is the end of capitalism,” said Iran’s President Mahmoud Ahmadinejad, as good an authority as any these days. To steal a famous phrase, it seems like “We’re all Muslim extremists now.”
This week, Alan Greenspan, of all people, joined  the market-failure parade. He has his reasons, of course. Better the market should take the hit for creating the mortgage and financial crisis than anything he did to monetary policy as chairman of the U.S. Federal Reserve during the great U.S. housing boom. More about Mr. Greenspan later.Bashing markets is fun, convenient and politically popular. But it also takes a certain willful disregard of events and policy to reach the conclusion that capitalist failure brought the world economy to its knees. Only conscious effort and stubborn, even malicious, obtuseness could lead anyone to conclude that, on the basis of recent events, the sources of the financial meltdown are corporate, that big business made us do it.
The role of bankers and other market players in causing the current crisis is undeniable, but it is limited compared with the massive role played by governments. From U.S. housing policies to financial regulators to central bank actions all over the world, the evidence is overwhelming that the causes of today’s turmoil can be traced to massive government failure.
This failure of policy, moreover, is now being compounded. From the G7 to the G20 and beyond, governments are scrambling to push through measures and policies that cannot possibly have been thought through or properly evaluated. Bad interventions are inevitably being poured on to extinguish the fires created by previous bad interventions...

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...

Well, Donald Trump saying, anything close to that $700 billion bailout would be a black eye for an economy he says rushing into one big depression.

Real estate mogul Donald Trump joins me now on the phone.

Donald, you could take care of this issue quite quickly by writing a check yourself, but I guess that is out. What do you make of this?

DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: Well, I think this it's a very, very sad period of time for this country, Neil.

• Video: Watch Neil Cavuto's interview

It's probably — we have not seen anything like this since probably 1929. And, you know, people are not discussing two very big issues, the war and the price of oil.

If you did not spend hundreds of billions of dollars on a yearly basis on the war, and if we got oil down, or if somebody knew how to speak to OPEC the proper way, the hard way, the tough way, so that oil would be down to $50, instead of $150, and now it is dropping — and, as I always say, all over the world, you have ships, tankers loaded up with oil.

There's so much oil, people don't know what to do with it. And, yet, because of OPEC, that is the story. It is very sad. But, if we got rid of this war, and if we got oil down, this country would be unbelievable. You wouldn't even need this.

(CROSSTALK)

CAVUTO: To be fair, Donald, a lot of that is a lot easier said than done. I know where you are coming from.

But you mentioned depression. That is a bit over the top, don't you think?

TRUMP: Well, I don't think so. In fact, on your show two years ago...

CAVUTO: Why? What would happen? What would happen? What would happen?

TRUMP: On your show two years ago, I really — I mentioned the word depression then.

Now, I did not know about a $700 billion bailout, in all fairness. And I think probably, it is something — it's sad, but, probably, it's something that has to get done, because your financial system is most likely going to come to a halt if it does not. So, it is a pretty sad day for this country.

CAVUTO: But what would $700 billion or this kind of money do to stop it? All I have seen, Donald, is, every time we shored up AIG, or done this money with Freddie and Fannie, or rescue Bear Stearns, and on and on, you know, we have a brief pop in the markets, a brief economic sort of lift, and then we sell off, and then people get depressed all over again.

So, wouldn't this be a more expensive version of that?

TRUMP: It could very well be.

The fact is, nobody knows what is going to happen. The day it is passed, maybe things go to hell anyway. Nobody really knows what is going to happen. But, psychologically, people want it to happen. And, if you have the right people running it — and that is the big question, but, if you have the right people running it, you can make a lot of money. You can take over companies, and, frankly, take big chunks of companies. If you loan this money the way Goldman Sachs perhaps used to loan money, or whatever, you would have — I think you could make some phenomenal deals.

CAVUTO: Well, you have done some phenomenal deals in down — in soft times. There is talk here about getting some sort of an economic czar in either a Republican or Democratic administration. Would you ever be interested in that?

TRUMP: Well, it is not something I exactly have thought of. I love the real estate business. I love what I'm doing.

But, if you got the right person in there, they would take that money, and you would double it, triple it, quadruple it. And then you would sell those companies back in good times. But, when they go into this fund, you have got to take a very, very big pound of flesh.

CAVUTO: Yes, very good point. I would immediately start buying brass if you got — if you got that job, right away.

TRUMP: Well, that would be very interesting. I will tell you, you would have a lot of fun.

(LAUGHTER)

TRUMP: You would make a lot of money. I can tell you that.

CAVUTO: There you go.

Donald Trump, always good. Thank you very much.

TRUMP: Thank you very much, Neil.

CAVUTO: All right.

The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations. It was enacted by the Congress in 1977 (12 U.S.C. 2901) and is implemented by Regulation BB (12 CFR 228). The regulation was substantially revised in May 1995, and was most recently amended in August 2005...

The above from the Federal Reserve.

...The CRA requires that each depository institution's record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution's application for deposit facilities...

...Neither the CRA nor its implementing regulation gives specific criteria for rating the performance of depository institutions. Rather, the law indicates that the evaluation process should accommodate an institution's individual circumstances. Nor does the law require institutions to make high-risk loans that jeopardize their safety. To the contrary, the law makes it clear that an institution's CRA activities should be undertaken in a safe and sound manner...

stated the law.

But it didn't turn out that way.

The National Community Reinvestment Coalition, ACORN later pressed for more loan criteria easing.

The Cato institute published this Report in 1995 warning about the pressure tactics leading to the new expansion of CRA.

United States Housing Bubble came on the heals of 30 years of Real Estate value increases fueled by entrants previously unable to enter the market as home buyers and later by investors who abusing the CRA lending criteria expansion further inflated home values slowing market absorption in an over supplied quick return hungry market.

United States housing market woes are in large part owed to the CRA and ACORN s pressures at extending credit where credit was not due (no pun intented).  Occurances of negative equity multiplied as 0 down mortages and re financing of existing homes became also commonplace damaging the lives of those mostly whom this program was originaly designed to help. Low income and minority (black and hispanic) home buyers. The road to this hell was also built with good intentions.

Fannie Mae, Freddie Mac bundled and sold these junk mortgages, first with Bear Stearns securitization while they held in their pockets Senators and Congressmen.

It is rather an example of absolute Chutzpah to have Senators Dodd and Obama crying fould about regulation and Congressmam Frank promising fixes as they were the biggest recipients of the largesse of Fannie & Freddie.

killed the US housing market and perhaps will take Wall Street with them if to no further extent than killing the international investor confidence.

The Times article reads like prophecy today. The market slowed down, borrowers defaulted and banks sunk in the bad paper.

...

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets   including the New York metropolitan region  will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans...

...

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s...

...If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry...

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...

The head of Soho China, one of the mainland s biggest commercial property developers, said on Thursday that she expected Beijing to announce further measures to loosen its tight control of the property market to avoid a slump.

...The property market is very important to China. It accounts for 10 per cent of GDP and affects many other industries such as banks... said Zhang Xin, chief executive...I don’t think the government will want to see a hard landing...

...

China s property market has seen a significant slowdown this year after the government put in a series of regulations, such as a restriction on mortgage lending, to take the steam out of the sector.

The volume of property transaction fell 36 per cent in Beijing in August, according to Soho China, and dropped by an even bigger degree in Shanghai. Home prices in 70 major Chinese cities rose 5.3 per cent in August,  the slowest since February 2007, down from 7 per cent in July.

In a move to boost the domestic economy and the property sector, China’s central bank this week cut the country’s benchmark interest rate for the first time in six years...

...

Ms Zhang said on Thursday that she expected China’s regulators to reveal more policies to rebuild confidence in the property market amid increasing signs of disastisfaction from real estate investors.

In August Vanke, China’s biggest property developer, slashed prices by up to 25 per cent for some projects. The move angered those buyers who had already paid for their yet-to-be-completed apartments on similar properties, after Vanke refused demands for refunds. The move prompted a group of customers to demonstrate in Vanke’s Hangzhou office, destroying furniture and overturning desks.

...The anger has turned into a social unrest. The government does not want to see that,... said Ms Zhang.

Ms Zhang said the significance of real estate investment in China would encourage the government to draw up further measures to support demand and help the industry to escape a severe winter. She expected those measures to be related to mortgages and lendings.

...The market is very tightened now. We think the government will loosen control. We hope and urge the government to do it,...said Ms Zhang.

Soho China on Thursday reported a net loss of Rmb145.8m ($21.3m) for the first half of this year, compared with a net profit of Rmb63m in the same period of 2007, mainly due to a lack of new completed projects. The company said its results would improve in the second half when the bulk of this year’s turnover is booked.

Shares of Soho China fell 4.6 per cent to HK$2.7 in Hong Kong on Thursday, after plunging 66 per cent since the start of the year.

Read Article

...The property markets of Asia Pacific region, which saw robust growth in last few years, are now facing a slowdown that is expected to continue for at least a year, global real estate consultant Jones Lang LaSalle said in its latest report....

...The Asia Pacific property markets are entering a correction phase that will continue over the next 12 months at least,... Jones Lang LaSalle (JLL) Head of Research (Asia Pacific) Jane Murray said in a report  Asia Pacific Property Digest Second quarter 2008...

...

The rapid run-up in rents and capital values seen in recent years has come to an end in most markets, he added.

...Activity levels are now slowing in many of Asia Pacific's property markets following the frenetic pace of the last few years... the report said.

Murray, however, noted that in contrast to previous cycles, the extent of the downturn is expected to be moderate in most markets in Asia Pacific given the underlying sound fundamentals.

The long term structural drivers and economic growth prospects would ensure that the region continues to attract an increasing share of global real estate capital, he added...

...

In the office sector, he said more companies are putting expansion plans on hold, contesting renewal rates and delaying previous plans to upgrade their facilities.

"Historically low vacancy rates and supply constraints in most markets will help to mitigate the impact of a weakening in occupier demand," he said.

However, Murray pointed out that potential oversupply is becoming an issue in some parts of the region, notably tier I cities in China and some of the Indian suburban micro markets...

...Tokyo has been the first major office markets to move to the downturn phase of the cycle and others are expected to follow suit over the next 12-18 months,...he said.

The Jones Lang LaSalle report highlighted that the retail sector has continued to perform well over the first half of the year, with Hong Kong and Shanghai posting the highest rental growth in the region. However, it said that emergence of more difficult trading conditions, coupled with new supply coming on line in number of markets is likely to result in more moderate rental growth going forward.

The retail sector continues to see significant structural change, particularly in the rapidly emerging markets of China and India where malls are becoming a more prominent feature of the landscape and the expansion of high-end retailer continues apace.

...

Developers and analysts say they expect intense consolidation in the months ahead, along with a fall in prices from dizzying heights. Moscow real-estate prices have jumped nearly 30% this year, with average residential prices hovering at just below $465 a square foot, after tripling in the past three years.

The slowdown is likely to trim economic growth and carries political risk for the Kremlin, which has made affordable housing a priority. The government wants to raise living standards and get people out of cramped and decrepit Soviet-era apartment blocks.

Dmitry Lutsenko, of Moscow-based developer Mirax Group, said his company has canceled $4 billion of new investment projects and would focus on existing projects instead...

...

Prime Minister Vladimir Putin, who was in Sochi visiting some of the Olympic sites Thursday, called on officials to ensure that projects for the Games are completed on schedule.

Michael Lange, chairman of real-estate services firm Jones Lang Lasalle Russia, said that market players were looking to the Kremlin for action.

Finance Minister Alexei Kudrin offered some hope Thursday, saying the government would inject 60 billion rubles ($2.36 billion) into a federal agency to be spread among banks that lend money to construction firms. That money is part of a massive rescue plan for Russia's financial system. It came as Fitch Ratings said Russian real-estate developers and construction companies were most at risk as lending dried up.

Developers say they expect a moderate correction in prices, not a sudden collapse. Demand continues to massively outstrip supply, they say, while Russia's mortgage market is embryonic. Most people own their homes outright, since the homes were given to them by the state when the Soviet Union collapsed...

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...The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

But really, it isn't. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves...

...

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ...It is a classic case of socializing the risk while privatizing the profit...

...

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one little footnote to the story that s worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.

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...

Sept. 8 (Bloomberg) -- The number of Japanese real estate companies filing for bankruptcy protection surged 23.5 percent in August from a year earlier as banks choke off loans to the industry.

The number of developers filing for bankruptcy protection reached 42 last month, Tokyo Shoko Research Ltd., a credit research firm, said in a report today. The total number of bankruptcies rose to the highest for the month of August since 2003, gaining 4.2 percent from a year earlier.

Liabilities at failed real estate companies more than doubled from July to 438.97 billion yen ($4 billion), although they fell 24.9 percent from a year earlier because of the bankruptcy a year ago of unlisted Azabu Tatemono KK with 564.8 billion yen of debt. Accumulated debt by failed real estate companies accounted for half the total liabilities among all Japanese companies that went under in August.

Banks cut lending as growth in Japan s property market slowed and the collapse of the subprime market in the U.S. kept potential buyers from making acquisitions. Japanese developers are also being squeezed by higher prices for steel and other raw materials used in construction, and by the government s revisions to building-approval regulations last June that delayed projects.

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...The government takeover of Fannie Mae and Freddie Mac likely will help ease mortgage rates for home buyers, say economists, home builders and housing experts. But it won t cure the housing market s biggest ailments: falling home prices and rising foreclosures...

...The housing market is stuck in a vicious cycle. It started with an oversupply of homes that eventually caused prices to plummet. Falling prices led to waves of foreclosures, as homeowners ran into problems refinancing their mortgages or selling their houses. Banks are reluctant to lend when home values keep sinking and defaults are rising, curbing housing demand further and fueling more price drops and defaults...

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In July, David Frum wrote Here about the history and the misfortunes of Fannie and Freddie.

...

Pessimists may worry about the property market in Dubai but the latest figures show the place is booming with 25,000 people taking up residence every month.

That works out at 33 people an hour and these figures don t include tourists who have now surpassed the 5 million per year mark. With the current population already topping 1.6 million it is anticipated that by 2010 there will be 2.2 million, with long term estimations of over 4 million residents by 2020.

There can be little doubt that Dubai is booming.  To get some sort of visual perspective on the numbers involved and the overriding popularity of Dubai, it is perhaps easier to imagine the equivalent of the crowd of a premiership football match arriving every month,' said Oliver Hickey European Finance Director of Profile Europe (UK) Ltd, real estate and property consultants...

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...

Property development in Costa Rica is reaching out to previously inaccessible areas and offering investors different choices, according to a new guide.

The opening of previously non developed areas along with government investment could create a property boom, according to the publication, Costa Rica - The Owners Manual.

Developments underway or starting soon include the largest full-service marina in Central America, new hospitals, a new airport and new roads....

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...

With resort projects around the world dangling everything from satellite-ready security technology to a year's worth of coconut oil spa treatments, developers are struggling to find new perks to entice luxury home buyers.

The latest addition to the goody list: private jets.

Projects around the world have started touting access to planes, free flights and discounts on charter services, hoping a few free rides will help close a deal on a vacation home...

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...

LOS ANGELES: Candy Spelling, widow of the famous American television producer Aaron Spelling, is downsizing.

After nearly 20 years in The Manor, a 56,500-square-foot, or 5,250-square-meter, French chateau-style home known for its size and extravagance - it includes a wine-tasting room, a bowling alley, a silver room, a china room and a well-known gift-wrapping room - she says she is ready for the next trophy property: buying an apartment in a high-rise condominium...

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Signals are there that the market is picking up, sales are up as prices have fallen enough to allow more affordability for some segments of first time buyers. 

Still, sales are mostly foreclosures and fast sales.

...

Resales advanced more than forecast to an annual rate of 5 million, with at least one-third of the purchases coming from foreclosed properties, the National Association of Realtors said today in Washington. At the same time, the median price dropped 7.1 percent from July 2007, and the number of homes for sale jumped to a record.

Sales averaged a pace of 4.95 million the past three months, the same rate as the previous period, indicating that purchases may have touched a bottom. At the same time, the glut of houses for sale means property values will probably keep dropping, putting pressure on household wealth and consumer spending...

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...

For the past year, apartment buildings have been one of the few bright spots in the real-estate industry as people forced out of the home-buying market by foreclosures or the credit crunch have turned to renting.

But now the specter of job losses is beginning to spread the gloom into that sector as well. As would-be renters are doubling up in apartments or moving in with friends and families, rents and occupancy rates are beginning to fall in many cities.

In many markets, our new prospects are beginning to resist the current and increasing levels of market rents we ve enjoyed over the past quarter,..David Neithercut, chief executive of Equity Residential, told investors during this month's earnings call. While the Chicago-based apartment owner, one of the largest in the U.S., reported an increase in funds from operations of 1.5% last quarter, it lowered its estimates for comparable-property revenue growth.

Job losses bode poorly for apartment-company stocks, which have outperformed their real-estate rivals so far this year. The Dow Jones Residential REIT subindex is up 14% year-to-date, while the overall Dow Jones Equity REIT index, which includes hotels, retail, self-storage and office properties, is down 1.8%.

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Also good news from Israeli Bank previously deep into sub prime mess.

Bank Hapoalim Ltd. (POLI IT) gained for the second day, advancing 0.33 shekel, or 2.3 percent, to 14.90. The lender that took the biggest writedown on subprime-linked holdings of any Israeli bank will probably report a second-quarter profit after it sold assets, according to an analyst survey...

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...

The company's board also approved an increase of $800 million in capital to wholly owned Hong Kong commercial banking unit China Construction Bank (Asia) Corp., the Beijing-based bank said in a statement to the Hong Kong's stock exchange today.

China Construction's board also approved a transfer of $300 million to CCB International (Holdings) Ltd., another fully owned unit, which underwrites sales of shares and bonds in Hong Kong, the bank said in the statement.

The capital increases are subject to the approval by the relevant regulators, China Construction said.

The bank said on Aug. 22 that first-half profit surged 71 percent to 58.7 billion yuan on more lucrative lending and increased fee-based services.

China Construction's Hong Kong-traded shares fell 7.6 percent this year, making it the sixth-best performer on the local benchmark Hang Seng index, which has dropped 27 percent. The stock fell 2.3 percent to HK$5.97 on Aug 21. The market was closed Aug. 22 for a typhoon.

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A total of 5.435 million new and existing homes were purchased in July at an annual pace, according to the median estimate of economists polled by Bloomberg News. June's 5.39 million rate was the weakest since at least 1999. Spending probably rose 0.3 percent in July, half the prior month's gain.

The real-estate recession will persist into next year as stricter lending rules and higher borrowing costs shackle demand. At the same time, equity is disappearing as home prices fall, and wages aren't keeping up with inflation, depriving Americans of the means to maintain spending, the biggest part of the economy.

``The economy is going down a shaky path,'' said Maxwell Clarke, chief U.S. economist at IDEAGlobal Inc. in New York. ``We're not going to see a rebound in housing anytime soon. Consumers are living hand to mouth, and the outlook for spending is very weak.''

Purchases of new houses dropped 0.9 percent to an annual rate of 525,000, according to the median estimate of economists polled ahead of a Commerce Department report on Aug. 26. March's 513,000 pace was the lowest since 1991.

Resales of existing homes, compiled from closings and reflecting contracts signed weeks or months earlier, will be reported by the National Association of Realtors tomorrow. Purchases gained 1 percent to a 4.91 million annual rate, staying near June's 10-year low, the survey median showed.

Timelier Gauge

While sales of previously owned homes account for about 85 percent of the U.S. market, new-home purchases are considered a timelier indicator because they are based on contract signings.

The slump in demand is keeping property values under pressure. The S&P/Case-Shiller index of home prices in 20 metropolitan areas probably fell in June, the survey showed. The figures, due on Aug. 26, would extend a string of declines that began in August 2006.

Consumers, after getting a temporary lift from the government's tax rebates earlier this year, are focusing on buying necessities and hunting for bargains to stretch their paychecks following the jump in food and fuel costs.

Home Depot Inc., the world's largest home-improvement retailer, said second-quarter profit fell 24 percent, its eighth straight quarterly drop. The Atlanta-based company forecast a decline in sales and earnings for the year.

Consumer 'Pressure'

``We continue to see pressure on our market and the consumer,'' Chief Executive Officer Frank Blake said in a statement on Aug. 19.

Commerce Department figures on Aug. 29 will underscore the dimming outlook for consumer spending, according to the Bloomberg survey.

The report is also projected to reinforce concern over inflation. The price gauge tied to spending patterns probably rose 4.5 percent in the year ended July, the biggest 12-month gain since 1991.

The measure that excludes food and energy costs, the one tracked by Federal Reserve policy makers, probably rose 2.4 percent from a year earlier, the biggest gain since February 2007, the survey showed.

Concerns about slower growth and the pickup in prices led Fed policy makers to hold the benchmark interest rate at 2 percent this month. Minutes of the Aug. 5 meeting, to be released Aug. 26, may shed more light on the debate within the central bank about the future direction of rates.

Exports

The one bright spot for the economy remains the narrowing of the trade deficit. A surge in exports caused the economy to grow even faster in the second quarter than previously projected. Revised figures from the Commerce Department, due Aug. 28, may show the economy expanded at a 2.7 percent annual rate from April through June, up from an advance estimate of 1.9 percent issued last month, according to the survey median.

``The data releases this week should illustrate the stark contrast between how well the economy performed in the second quarter and how bad the outlook for the second half of the year is,'' said Paul Ashworth, international economist at Capital Economics Ltd. in London.

Other reports this week may show orders for durables goods stalled in July and confidence among American consumers was little-changed this month from multiyear lows reached earlier this year, even as gasoline prices retreated.

                         Bloomberg Survey

================================================================
                        Release    Period    Prior     Median
Indicator                 Date               Value    Forecast
================================================================
Exist Homes Mlns          8/25      July      4.86      4.91
Exist Homes MOM%          8/25      June     -2.6%      1.0%
Case Shiller Monthly YO   8/26      June     -15.8%    -16.2%
Case Shiller Monthly In   8/26      June     168.5     167.2
Consumer Conf Index       8/26      Aug.      51.9      53.0
New Home Sales ,000's     8/26      July      530       525
New Home Sales MOM%       8/26      July     -0.6%     -0.9%
OFHEO HPI MOM%            8/26      June     -0.3%     -0.4%
OFHEO HPI QOQ%            8/26    #VALUE!    -1.3%     -1.6%
Durables Orders MOM%      8/27      July      0.8%      0.0%
Durables Ex-Trans MOM%    8/27      July      2.0%     -0.6%
GDP Annual QOQ%           8/28      3Q P      1.9%      2.7%
Personal Consump. QOQ%    8/28      3Q P      1.5%      1.6%
GDP Prices QOQ%           8/28      3Q P      1.1%      1.1%
Core PCE Prices QOQ%      8/28      3Q P      2.1%      2.1%
Initial Claims ,000's     8/28    Aug. 23     432       425
Cont. Claims ,000's       8/28    Aug. 16     3362      3380
Pers Inc MOM%             8/29      July      0.1%     -0.2%
Pers Spend MOM%           8/29      July      0.6%      0.3%
PCE Deflator YOY%         8/29      July      4.1%      4.5%
Core PCE Prices MOM%      8/29      July      0.3%      0.3%
Core PCE Prices YOY%      8/29      July      2.3%      2.4%
Chicago PM Index          8/29      Aug.      50.8      50.0
U of Mich Conf. Index     8/29     Aug. F     61.7      62.0
=============================================================================

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... Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.

Negative equity and declining prices are making it difficult for homeowners to sell property for a profit. Almost one-quarter of U.S. homes sold in the past year were for a loss, Zillow said. That contributes to the foreclosure rate because some homeowners can't absorb the loss and end up surrendering their homes to the bank that holds the mortgage, said Stan Humphries, Zillow's vice president of data and analytics.

``For homeowners who need to sell, this is a gravely serious situation,'' Humphries said in an interview. ``It can also be harmful to communities where the number of unsold homes adds more to inventory and puts downward pressure on prices.''

The highest percentages of homeowners with negative equity were located in California. In four of the state's metropolitan areas -- Stockton, Modesto, Merced and Vallejo-Fairfield -- the number of homeowners whose mortgage debts exceeded the values of their properties topped 90 percent, Zillow said.

In five more California areas -- the Inland Empire (Riverside-San Bernardino), Bakersfield, Yuba City, El Centro and Madera -- the percentages were more than 80 percent.

Foreclosure Sales

In Stockton and Modesto, more than half the sales in the second quarter were of foreclosed homes, Zillow said. Almost 15 percent of sales nationwide were foreclosures, the company said.

Prices fell on a year-over-year basis in 140 out of 165 markets, Zillow said. Pittsburgh, Oklahoma City and Austin, Texas, were among the markets that saw rising home values, the company said.

The 9.9 percent decline in home values was the largest on a year-over-year basis in at least 12 years, Zillow said. The median home price of $206,919 was the lowest since the fourth quarter of 2004, the company said...

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... Focus on one neighborhood: Although distressed properties are found everywhere these days, not every one is a good deal, especially if the seller bought at the top of the market or if the entire neighborhood is undergoing a decline. It's best to concentrate on places where there are relatively few distressed properties and good job growth. These areas will revive quickly once housing returns to normal. Once you've targeted and studied property values in a particular neighborhood, drive around and look for properties that aren't as well-kept as the ones around it -- then start ringing doorbells. You may be able to buy directly from an owner who's in financial trouble even before the loan defaults.
 
• Research the property: Although major real-estate Web sites and portals for both agent-listed and for-sale-by-owner properties list foreclosures these days, most provide minimal information and refer you to a subscription-based foreclosure listing site. Some lenders also list the properties they've taken back, though information on these properties is also sparse. (Here's a good link to these lender sites)
 
• Once you've targeted a property, check out the local assessor's office: Web sites for these offices often list the owner of the property, tax information, assessed value, square footage and aerial pictures. Most importantly, they reveal what the seller paid for the home, which could be more or less than the property is worth now. The best deals generally come from sellers who have owned their homes for a long time and have built up some equity...

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300 exibitors will display their best at the coming Property Investor Show in London at the ExCel centre on the docklands starting September 19, 2008

Features will include strong emphasis on international opportunities with presenters from Asia and the Middle East along with UK and Spanish groups.

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