The Star Tribune reports from Minnesota. "Banks are foreclosing on three condominium projects in downtown Minneapolis, adding to the growing list of canceled or postponed condo developments. Each of the three projects being foreclosed on has its own set of issues, but the deteriorating condo market appears to be the common backdrop."

"Minnwest Bank M.V. is in the midst of foreclosing on one completed and another proposed condo project. The Minnesota bank recently was the high bidder at a sheriff's sale of Mill Trace Condominiums, a 50-unit project that was developed by Niles Schulz of Dolphin Development."

"Schulz said the problems are due to sluggish sales, with only 16 units sold so far. 'We think we've corrected that problem,' he said, with the installation of a new sales team."

"Mary Bujold, president of (a) Minneapolis multifamily housing consultant, said she does not believe that foreclosures will become a widespread problem with area condo developments. Unit owners in developments that are foreclosed typically aren't affected much unless they want to sell their units quickly, she said."

"That's because foreclosures usually result when developers have failed to sell enough units to repay their construction loans. 'Obviously, it's going to be more difficult to obtain financing [to buy a unit] if there are a lot of other unsold units in the building," she said."

"Bujold said it's likely that the soft market will cause more developments to be put on hold. That already has happened, with some projects canceled altogether and others redrawn to eliminate or reduce the number of residential units planned."

The Star Phoenix from Canada. "Saskatoon's real estate market is showing signs of stability after an $11,000 drop in the average price of a home from August to September."

"As homeowners put their properties up for sale in preparation for a move to a new home or condo, people looking to buy have a larger inventory of houses to choose from, easing the rush to purchase and lowering prices, said Harry Janzen, executive officer of the Saskatoon Region Association of Realtors."

"September's average price was 49 per cent higher than what was seen in September 2006, rising to $242,091 from $162,116 last year, Janzen said."

"'With more listings available, people can go about their business in what we would call more of a normal fashion.' he said. 'Right now we're hoping, and we're always hoping, that a levelling in the marketplace will take place and that's certainly what seems to be happening.'"

"Sales in the rural residential sector saw a 28 per cent drop to 63 sales from 87 in 2006. While the average rural residential selling price reached $209,494 in September, up 51 per cent from $138,550 in the same month last year, Janzen isn't sure why sales are off outside of the city."

"'We're not quite sure why that is, outside of the fact that there's a little less demand for the rural residential and certainly demand for city residential property remains high,' he said."

"'From an industry perspective we're happy to see that the average sale price isn't going that much higher because it will certainly allow us to create a stability in the marketplace and not have to worry about some of the sustainability issues that might accompany a steady increase in the market,' he said."

The Calgary Sun from Canada. "Calgary house prices sank $10,000 last month, the fourth decline in a row as inventory jumped and sales slumped, according to statistics."

"The median price of homes fell to $420,500 last month, down from $430,000 in August, said the Calgary Real Estate Board. Yet, despite the falling prices, CREB president Ron Stanners said city home prices are still higher now than they were last year at this time."

"'The market place is very good right now, but it has slowed down over the last three or four months,' said Stanners. 'It's beginning to move more towards a buyers' market but even still, sellers are still getting much more today than they were this time last year.'"

"The number of single-family homes on the market jumped 5.15%, but sales slipped 19.03% in September from August, CREB figures say."

"The pattern was identical in the condominium market, where more supply and fewer sales also resulted in more affordable prices. The number of condos going up for sale in September increased 10.88% over August, while there was a 12.66% decrease in units sold."

The Canadian Press. "There's still plenty of room for 'exotic' mortgages to grow safely in Canada's real estate sector, despite the U.S. subprime meltdown, says a senior economist."

"The U.S. is in a mortgage crisis because of an overuse of atypical mortgage products, many sold to subprime, or high-risk, borrowers, Benjamin Tal of CIBC World Markets said Monday in a report. Exotic mortgages include those with low introductory interest rates, interest-only payments, and amortizations periods of up to 40 years."

"'It's true that the surge in exotic mortgages since 2004 created an artificial demand in the housing market south of the border, and was primarily behind the current mess in the subprime space. A sharp deterioration in underwriting standards in those years and extremely easy ways of passing on the risks were the main catalysts there,' said Tal, noting neither of the two latter factors is an issue in Canada."

"Borrowers with poor credit histories hold 20 per cent of the U.S. mortgage market, whereas subprime borrowers represent only five per cent of the market here. That means there is still space for unusual products to evolve without the market imploding here, Tal says."

"Tal wrote his report in response to recent comments by Bank of Canada governor David Dodge, who said certain mortgage products, such as loans with long amortizations, have overheated the real estate market. 'And who can blame him, given the experience south of the border?' Tal wrote in his report, which he called 'Dodging Innovation.'"

"'Not only are mortgage innovations important to a normally functioning market, but their role in Canada should, in fact, grow over time. Those new products are largely about serving under-served populations through more effective market segmentation and niche marketing,' Tal wrote."

"Alternative lenders in Canada include companies like Home Trust, operated by Home Capital Group Inc., which targets low-income applicants who are still often rejected by banks, such as new immigrants without a credit history, and the self-employed."

"'Limit mortgage innovation in Canada, and you shut out those fast-growing segments of the population from the housing market,' Tal wrote."

"But Vince Gaetano, a senior consultant with MonsterMortgage.ca...pointed to teaser products, such as CIBC's 'better than prime mortgage,' which offers a introductory rate of 1.01 per cent below CIBC prime (now 5.24 per cent) for the first nine months and a low 0.25 per cent below CIBC Prime rate after than for a five-year term. Overall, that works out to 5.88 per cent interest on a five-year term, which is a discount of only 0.37 per cent below prime."

"'That marketing ability to entice people with teaser products makes the banks more money,' Gaetano said. 'There's an associated cost with these exotic products that is cost-prohibitive.'"

"And while Tal has dismissed suggestions by Dodge that amortization periods of more than 25 years, reflected in 40 to 50 per cent of new mortgages taken out in the last year, are a major driver of inflation in the Canadian real estate market, Gaetano agrees with Dodge, noting the average mortgage extended by MonsterMortgage.ca has jumped from $250,000 to $315,000 in two years."

"'It pushes people into brackets where probably, they shouldn't be,' Gaetano said. 'They're just extending themselves to as much as they can afford. There seems to be a lot of people over-buying. They're saying: let's skip the starter.'"

"As for longer amortization periods, the 40-year-amortization has been available less than a year, Nick Kyprianou, chief operating officer of Home Capital Group, said they are creating 'better affordability.'"

"'They added a little more legs to the market,' Kyprianou said. 'People who couldn't get into the housing market now can,' he said, adding owning a home results in forced savings."