Some housing bubble news from Wall Street, Washington and beyond. "The outlook for home prices this year, already expected to post the first drop on record, got worse Wednesday as an industry group cut its forecasts for sales and prices for 2007. The National Association of Realtors said it now sees the median price of existing homes sold falling 1.3 percent this year."

"That's almost twice the 0.7 percent drop forecast just two months ago, and is worse than the 1.0 percent drop in prices it estimated in May."

"'We continue to experience a temporary distortion in comparing median existing-home prices,' said Lawrence Yun, NAR senior economist. 'Because the sales volume has shifted from many high-cost areas to moderately priced markets, we’re not getting a true apples-to-apples comparison.'"

"'Buyers today need to have a traditional view that housing as a long-term investment is an added benefit to their shelter expense. If so, that investment generally will build a nice nest egg over time, especially if they use a traditional mortgage instrument that reduces debt,' Yun said."

The Associated Press. "(The NAR) said Wednesday it expects sales of existing homes to drop 4.6 percent this year to 6.2 million Two months ago, the group had predicted a 2.2 percent decline for the year."

"Sales of new homes are forecast to drop 18.2 percent to 860,000 compared with an earlier estimate of a 14.2 percent decline."

From Reuters. "Subprime mortgage guidance opposed by some of the nation's biggest lenders will be 'largely intact' when completed by a group of regulators later this month, Federal Deposit Insurance Corp. Chairman Sheila Bair said on Wednesday."

"The guidance 'is simple common sense,' she said."

"Countrywide executives have said that some 60 percent of borrowers given adjustable-rate loans made last year wouldn't have qualified under the 'fully indexed' rate. About half the subprime customers with adjustable-rate loans were able to refinance into a prime loan before payments on the original mortgage rose, they said."

"But lenders have failed to prove to regulators that those borrowers wouldn't be better served with a fixed-rate loan. 'Why do you need this payment shock feature to get people into homes? I really don't understand that,' Bair said."

From Fitch Ratings. "In the context of recent adverse developments in the U.S. mortgage market, Fitch Ratings released a special report that examines recent trends in the domestic business of the U.S. mortgage insurance companies, and the results show delinquencies are on the rise at these firms."

"According to the report, 'Across the Board, Delinquencies Are Up - An Analysis of U.S. Private Mortgage Insurance Exposure,' market concerns have been broadly centered on 2006 vintage originations, but to some degree concerns extend to originations of the preceding years as well."

From Bloomberg. "Francisco Paramés, the best-performing fund manager in Spain for the past five years, predicts that a real estate crash in his homeland will spread, dragging down companies throughout the country. Lending by banks and other credit institutions has almost tripled in Spain since 2000."

"'Credit has increased by 25 percent a year for six years,' Paramés said. 'That's never happened anywhere else in the world, even China.'"

"Javier Usua and Ruth Graneda never got out of the car when they visited Sanchinarro and Las Tablas, two of Madrid's biggest new suburban developments. The concrete-block buildings and empty streets were all they needed to see."

"'We came to look at apartments but found ghost towns,' said Usua. 'You'd need to drive miles for a loaf of bread or cigarettes and my girlfriend found it creepy and unsafe so we turned around and left.'"

"The abandoned developments are evidence of a housing glut that will lead to Spain's first decline in home prices since at least 1992, when the Housing Ministry started keeping records. Spanish builders constructed 750,000 houses and apartments last year, more than France and Germany combined, while annual demand runs about 60 percent of that, according to the Finance Ministry."

"'The real killer of the housing market is the immense oversupply,' said Gonzalo Bernardos, a professor of economics at the University of Barcelona. 'Prices are already unofficially falling.'"

"'We live in a country where everybody understands that appraisals are poetry,' said Jesus Encinar, CEO of a property Web site that tracks existing home prices in Madrid, Barcelona and Valencia. 'Bankers have said to me, 'Why do you care if the appraisal is fake? It will be true in the future.'"

"'The problem here is that people have this unshakeable conviction that prices simply cannot fall,' Encinar said."

The Advertiser from Australia. "Leading mortgage insurers are feeling the pinch from rising home loan defaults, after insurance claims from banks and other lenders soared by more than 500 per cent during last year."

"The two big mortgage insurers were hit by sharp rises in claims from home lenders according to 2006 accounts filed with the Australian Securities and Investments Commission."

The Edmonton Sun from Canada. "Edmonton's real estate war is getting intense as a tidal wave of Edmontonians decided to unload their properties last month, clearly taking advantage of soaring house prices which saw the average single family dwelling jump from $282,208 a year ago to $426,028 last month."

"You also have to be asking if this is the storm before the lull after the MLS residential inventory shot up by 42% at the end of May to a fearsome 4,485 units on the books."

"Realtors Association president Carolyn Pratt said she is 'upbeat' about the rising prices and short selling cycles. Pratt predictably urged sellers to 'consult a realtor before venturing into the market" where the average single family dwelling price is jumping by over $400 a day.'"

"So why have all these folks suddenly decided to cash out? And do they know something that Pratt doesn't?"

The Winnipeg Sun from Canada. "In the suburbs or by the docks, the Manitoba real estate market is sizzling. In May, Winnipeg's housing market smashed sales and dollar volume records to chart its best month ever, while the province's average waterfront cottage price hit almost double that of the average home."

"'It's the number one month ever. I think it's great because every time there's a house sold in Winnipeg, there is a great spinoff for so many different people and there is wonderful job creation activity,' said Wes Schollenberg, Winnipeg Realtors Association president."

"Schollenberg admits skyrocketing prices can make home-buying difficult. 'The buyers have to be really patient and it can be very frustrating,' Schollenberg said."

The Star Phoenix from Canada. "Curtis Olson recently purchased and renovated a two-storey home close to the Saskatoon Farmers' Market. Olson put the house on the market himself last Friday. By Monday, it had sold for the asking price of $164,000. The buyer? An Albertan who didn't even bother to come and see it. In fact, half of the calls he received were from Alberta."

"Olson's experience isn't unique. Investors from Alberta and British Columbia are buying up properties in Pleasant Hill, Riversdale, King George and Holiday Park in increasing numbers, without even seeing them."

"Out of 540 properties listed in the area since January, 480 sold at an average price of $121,000, not bad for last year's lowest-selling area, which had an average price of $86,000."

"'We're seeing a number of investors from Alberta and British Columbia coming in and buying two or three properties at one time,' said Harry Janzen, executive officer of Saskatoon Region Association of Realtors. 'Some are even buying homes without coming to look at them, which tells us that there's not a direct interest in the home, but rather the land value and location.'"

"'Many of our out-of-province investors want big lots and don't really care if the homes are dilapidated,' said Realtor Susan Toledo . 'They want to take them down and rebuild to generate revenue.' She expects house prices to keep climbing."

"Canadian building permits slipped 8.4 percent in April, after rising at a record pace the previous month. Permits have been volatile all year, rising 27 percent in March and posting double-digit gains or losses throughout the first quarter. Still, year-to-date permits are 15 percent ahead of where they were in the same period in 2006."

"'There are still no compelling signs of distress in Canada's housing market,' CIBC World Markets economist Warren Lovely wrote in a note to clients today."