The Housing Bubble

Lehman is due for some liquid low-interest life support loan injections from the Fed, to shore up its balance sheet after gambling losses on commodities and California real estate speculation.

Futures drop as Lehman, fund fallout weigh
Wed Sep 3, 2008 12:46pm EDT

By Ellis Mnyandu

NEW YORK (Reuters) - U.S. stock index futures fell on Wednesday as news of the demise of a hedge fund partly owned by Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) rekindled worries about the outlook for the beleaguered financial services sector.

News that hedge fund manager Ospraie Management LLC will close its flagship fund after it plunged 27 percent in August due to losses in energy, mining and natural resources equity holdings damaged stocks in Europe where major averages slid 1 percent or more.

Shares of Lehman Brothers, which owns 20 percent of Ospraie, dropped nearly 3 percent to $15.71 before the bell.

Analysts said the hedge fund closure could complicate Lehman’s efforts to raise new capital as it seeks to bolster a balance sheet weakened by mortgage losses.

“The biggest drag on the market right now is the news involving Lehman,” said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

“The last thing Lehman needs while they are looking to raise new capital is to have skeletons like this falling out of the closet. There’s a clear possibility that this could impede the process of getting new investors in.”

Simon Jenkins in the UK Guardian:

http://tinyurl.com/6hndbo

“At last, a glimmer of sanity. Faced with what is said to be the greatest collapse in the housing market of modern times, the government has decided to do virtually nothing. Excellent.”

“As a general rule it is patent that falling house prices are good news for the poor. Only politicians and headline writers think otherwise. Each fall brings home ownership within reach of more people who could never have afforded it when prices were inflated by hysteria about “the right to home ownership”.”

“No one but speculators and land-bankers had an interest in the bubble, and many of them now are getting their fingers well and truly burned.”

War was declared today, 69 years ago…

We are on the verge of another war today, but not a shooting war, a war concerning matters of a financial nature.

Economic Hegemoney is up for grabs.

Now it becomes clear that what the financial press refers to as “commercial real estate” may really amount to no more than speculative gambles on residential housing, as it turns out that Lehman’s “ideal marriage” to a California land developer was more of an “ideal mirage.” Maybe the Korea Development Bank will come and rescue them before price discovery runs its full course of destruction.

We will have to wait for the peak of prime and Alt-A resets circa 2010 to test the theory that values along the coast will hold up better than the rest of the state. Recent news that the Case-Shiller/S&P Index levels for San Francisco, LA and SD were all off by 25 pct or so over the most recent year is not an encouraging sign for those who subscribe to this idea.

Lehman’s Bet on a California Developer
Yields a Lesson on Downside of a Boom
By MICHAEL CORKERY and SUSANNE CRAIG
September 3, 2008; Page C1

When the housing market was booming, Lehman Brothers Holdings Inc.’s bankrolling of a California land developer looked like the ideal marriage. Now, though, the mix of easy money and land speculation helps show why Lehman is scrambling to pare back its $40 billion commercial real-estate portfolio.

Lehman bet on the California real-estate market through its financing of SunCal Cos., a closely held developer that buys land, prepares it for houses and sells it to home builders. Flush with cash from Lehman and other Wall Street firms, SunCal acquired thousands of acres stretching from the desert to the Pacific Coast.

Some of that land now sits vacant in the state’s hardest-hit areas — and could have little value. Following this year’s sharp rise in gas prices and spike in foreclosures, some of SunCal’s remote projects may remain fallow for many years. However, Lehman says most of its remaining SunCal exposure is located along the Pacific Coast, where values have held up relatively well. ;-)

Lehman made many of its real-estate investments using funds it raised from others, selling much of its debt to other investors. But the investment bank ended up keeping $2.2 billion in exposure to SunCal on its books. The firm already has written down the value to $1.6 billion — and could face further write-downs if home prices and land values keep sinking.

Lehman has received a letter of intent from a buyer to acquire a 16-acre parcel near Long Beach, Calif., according to a person familiar with the matter. And with Lehman trying to shore up its balance sheet ahead of fiscal third-quarter results due later this month, there are reasons for Lehman to be a motivated seller.

“Right now they have assets out for cherry-picking,” says William Shopoff, who heads Shopoff Group, an Irvine, Calif., land investment firm that is looking to buy some SunCal-Lehman properties.

Besides the deal it is working on to offload much of its $40 billion in commercial real-estate assets by spinning them off into a separate entity, Lehman is continuing to consider other capital-raising options. On Tuesday, Korea Development Bank confirmed speculation that it is negotiating to invest in Lehman.
…
Lehman says 70% of what remains of its SunCal investment on its books is in seven projects, located mostly along the coast, where values haven’t fallen nearly as dramatically as in the inland areas. Ya already said that! ;-) But if these values fall further, Lehman may have to record more write-downs, something it is loath to do.

Lehman could also face pressure to sell its choicest assets because the properties are accumulating taxes and other expenses, while throwing off little or no income. There also are about $50 million in liens on the SunCal projects that Lehman is working to pay off.

Some of Lehman’s nearly two dozen SunCal projects are in far-flung exurbs, including $250 million in the Inland Empire, one of the nation’s hardest-hit housing markets. On average, Lehman has valued its inland lots each at $29,500 based on comparable land sales. But land values remain highly uncertain.

Tom Reimers, executive vice president at O’Donnell/Atkins, an Irvine real-estate advisory firm that brokered many deals for SunCal in recent years, says “with the declines we’ve seen in the residential development marketplace of 50% to 75%, some of their lots may be overvalued.”

Lehman is one of many Wall Street firms and investors enticed by visions of land riches.

Does anyone know why the august car and truck sales report keeps being delayed?

I sure hope the PPT is on high alert today, as it is starting out to be a bloody numbers kind of day on Wall Street.

http://hbrofcny.com/parade.html

Wow! Three ranches in the CNY Parade of Homes. For the past several years every single model, I believe, has been a Transitional or Colonial McMansion. The 2 story models look much smaller too.
Times, they are a-changin’.

I heard some local grumbles about last years Parade not going so well.

I might have to go check out sq footage and price.

The ponzi finance economy will not go quietly into the night.

“The American way of life is non-negotiable”. - Dick Cheney

BOOKS

Business Bookshelf
Foreclosed But Not Forgotten
By JAMES R. HAGERTY
September 3, 2008; Page A21

The Subprime Solution
By Robert J. Shiller
(Princeton University Press, 196 pages, $16.95)
[Business Bookshelf]

In recent times, investment bankers have used “financial engineering” to design ever more complicated ways to manage risk. Such efforts, though, helped to bring about the current mortgage-default debacle: Bankers, overestimating the powers of their own sorcery, deluded money managers into thinking that there were safe ways to invest in subprime home loans, even the ones granted to flagrant deadbeats at the peak of a housing bubble.

With “The Subprime Solution,” Robert J. Shiller offers his formula to protect us from repeating such disasters: more financial engineering. It would be easy to sneer at this idea, but Mr. Shiller, an economics professor at Yale University, always deserves a hearing. He was among the first well-known economists to predict that the U.S. housing boom would end with crashing prices rather than with the more or less soft landing promised by Realtors, home builders, mortgage bankers and Wall Street financial engineers. Some say that Mr. Shiller’s jeremiads were premature, but investors and builders would be better off today if they had listened to him.

Mr. Shiller also helped create the S&P/Case-Shiller home-price indexes, among the most closely watched gauges of changes in housing costs. Many Realtors now claim that these indexes exaggerate the rate at which prices are dropping. Curiously, the same Realtors did not warn us against exaggeration in the first half of this decade, when the Case-Shiller indexes were soaring.

In what he describes as a “brief manifesto,” Mr. Shiller argues that bailouts of distressed borrowers are inevitable to avoid wrecking our economy and shredding our social fabric — even though bailouts may punish the prudent (say, through higher taxes) while comforting those who gambled on real estate and lost. “Much as we might like to,” Mr. Shiller writes, “we cannot quickly and reliably sort out who is at fault and who is not.”

He joins others in calling for a new federal agency modeled on the Home Owners’ Loan Corp., created in 1933 to refinance mortgages and keep people in their homes. One of the best things about this agency was that it was designed to be temporary and, when it was wound down in 1951, managed to return a small surplus to the Treasury, as Alex Pollock, of the American Enterprise Institute, pointed out in an essay last year.

Looking beyond immediate fixes, Mr. Shiller expresses immense faith in the potential for financial technology to “stress-proof the whole economy.” Here he is partly talking his own book: He is a founder of a company that creates risk-management tools, such as futures contracts tied to home prices. Such contracts haven’t yet attracted much trading, but Mr. Shiller hopes that they will develop into a means of hedging against real-estate busts. If people could use futures to sell the housing market short — that is, to bet that prices will fall — bubbles would be less likely, he believes. This claim is debatable: Investors can sell stocks short, but that did not prevent the tech-stock bubble of the 1990s.

Mr. Shiller also calls for new types of insurance to protect people from the risks of falling home prices or from a long-term loss of income resulting from economic changes that render certain jobs obsolete or less lucrative. (But who would pay for this insurance and how much would it cost?) Among his many other ideas, Mr. Shiller wants government subsidies — perhaps in the form of tax credits — so that ordinary people can afford unbiased financial advice. As things now stand, home buyers rely too heavily on the advice of real-estate agents, mortgage brokers and others whose interests are often at odds with their own.

Americans make poor financial choices, Mr. Shiller argues, in part because they don’t take inflation into account. That oversight leads them into the error of believing that houses have been a great long-term investment. His answer is to supplement the consumer price index with a new unit of measurement based on the value of a “basket” of common goods and services. Buyers and owners could then use these baskets to get a better grip on how much things really cost once inflation is stripped out.

My favorite proposal is Mr. Shiller’s call for the creation of a standard, consumer-friendly home- mortgage contract, leaving out the booby traps that ensnared people during the boom (e.g., penalties for paying off a mortgage early). This standard contract could be the choice for people who lack the time or ability to read hundreds of pages of fine print. Mortgage bankers might howl that such an approach would inhibit innovation. But consumers could always choose a nonstandard contract if they could be persuaded that lenders weren’t out to gouge them. The rest of us could play it safe.

Mr. Hagerty writes about housing and mortgages for The Wall Street Journal.
WSJ book review

“Americans make poor financial choices, Mr. Shiller argues, in part because they don’t take inflation into account.”

I would opine that Americans make poor financial decisions as a result of living in a bubble economy for 30 years.

A thousand people a day? Which way?!

School enrollments estimated to be down compared to start of last school year. 1500 in Sarasota County, 400 in Manatee County, 100 in Charlotte County.

http://www.heraldtribune.com/article/20080903/ARTICLE/809030368/2055/NEWS&title=Student_counts_come_up_short

I stomached about an hour of elephantiasis last night, the thickening of their lies was all too apparent, and it appears their leader is now a lame-duck-leper.

I’ve noticed a proliferation of new for sale signs, others taken down, more FSBO signs, realtor sign swap. This churn phenomena is clearly growing and from personal knowledge, realtards are still pricing new inventory far beyond market value. Specifically one realtard I know who speculated on the way up is pricing new stuff at a point you can nearly gaurantee will never sell. These guys seems to be their own worst enemy. Sales everywhere are down a minimum of 30% and as high as 50% decline in sales volume. As much as I want to belabor the point that they are criminally stupid, at what point does this impediment to sales breakdown?

Also, it is worthy to mention that the general public is completely clueless about the cracks that seem so obvious to many of us. Aside from that, any thoughts on my first paragraph?

“We tried to pre-sell as a condominium and set up a sales office the same week that Public Works closed SW 2nd Avenue for renovations,” Hudson wrote. “We went through with a massive media campaign the likes of which have never been seen in Gainesville before or since. Needless to say, the potential buyers could not find us, and those that did could not get to our sales center. The project was in the right place at the wrong time.”

Yeah… that was the problem with putting luxury con-doze in the middle of Gainesville, FL. They originally said that they were targeting the ‘untapped’ graduate student market… you know, because people working 60 hrs a week for little or no pay need luxury con-doze.

http://www.gainesville.com/article/20080902/NEWS/809030295/1002&title=Gainesville_Greens_scrapped_after_3_years

Faster Pussycat, Sell Sell

Thanks for your response regarding your 8 years in Chicago. I have absolutely no reason to doubt you whatsoever. It’s just that I left the area right after high school in 1977 and really haven’t been back. At the time the number of ‘festivals’ seemed kind of minimal?

When I first moved to Portland we had The Rose Festival, Molalla had the Buckeroo and St. Paul had a rodeo. That was about it. Now it seems every town ( however tiny ) has more parades and festivals than you can shake a stick at! It’s just gotten completely out of control. I’d suggest a new category for anyone with an eye toward testing the waters for a retirement spot. Sure, number of days of sunshine, golf, cost of living, crime and a “Festival Rating”!

A perfect score of a 100 ( means they have absolutely NO d!ckwad fest’s! ) Each successive weekend befouled by inane ‘festivities’ deduct (2) points unless they’re back-to-back weekends then deduct (4)

Page 1 of 5
CREDIT BUBBLE BULLETIN
Ponzi dynamics still at play
Commentary and weekly watch by Doug Noland

US gross domestic product expanded expanded at a 3.3% pace in the second quarter, the strongest since 2007’s Q3 4.8%. Durable Goods Orders, Existing Home Sales, and the Chicago Purchasing Managers’ index were all reported “stronger-than-expected”. And with commodity prices almost 20% off July highs - and crude oil notably unimpressive this week in the face of a major Gulf hurricane - the markets seem to lend support to the waning inflation viewpoint.

The dollar rallied further last week. Meanwhile, despite Friday’s downdraft, Freddie Mac gained 60% this week and Fannie Mae advanced 37%. Monoline insures MBIA and Ambac surged 59% and 35%, respectively. MBIA saw its stock price more than double during August, to surpass US$16. The Bank index jumped 3.1% this week and the Broker/Dealers rallied 4.0%. Homebuilding stocks were up 9%.

Investors are increasingly willing to accept that the worst of the credit crisis has passed. Talk that the nation’s housing markets are bottoming becomes louder each week. And every day market participants seem more receptive to the “economic resiliency” thesis.

Layoffs could reach 1 mllion this year
Desk of a laid-off worker

August layoffs were down 14 percent from July, but it’s not all good news on the job loss front. This was the worst summer of layoffs since 2002. Steve Henn learns that an even grimmer picture could be yet to come.

In Fannie We Trust? I am hoping Wachter is not referring to stock market investors, as I keep hearing resurgent rumors about plans to wipe out the GSE shareholders in an upcoming bailout.

Wednesday, September 3, 2008

Renewed trust in Freddie and Fannie
Freddie Mac and Fannie Mae logos

The government’s implicit backing of Freddie Mac and Fannie Mae has apparently convinced investors that the two mortgage giants are a safe bet. John Dimsdale finds out why.
———————————————————————————-
John Dimsdale: Fannie and Freddie have lost some $14 billion over the past year as mortgage foreclosures spread. Their crisis convinced Congress to give the Treasury Department authority to prop up the two mortgage giants with taxpayer money, if necessary.

Susan Wachter: Fannie and Freddie and FHA are the game, the only game.

Wharton School professor Susan Wachter says along with the Federal Housing Administration, Fannie and Freddie are virtually the only financers of mortgages this year. And with the government implicitly backing their liabilities, investors feel safe.

Wachter: The entire federal government has come out one way or the other in supporting this debt as quite close to Treasury debt. Thus it’s secure. And it’s been clarified that it has the backing of the federal government.

Wachter says despite investor confidence, Fannie and Freddie won’t be back on solid financial footing until the housing industry turns around.

In Washington, I’m John Dimsdale for Marketplace.

I keep hearing GSE bailout rumors, with ‘experts’ conjecturing about whether shareholders will get wiped out. Isn’t this question largely moot, given the recent performance of GSE share prices? Or am I missing something here?

10 year at 3.69. Heh.

SEC Charges Credit Suisse Traders With Defrauding Customers
9/3/2008 11:26 AM ET

RTTNews) - Two traders associated with Credit Suisse (CS: News ) have been charged with defrauding customers, the Securities and Exchange Commission announced Wednesday. The SEC is alleging that Julian Tzolov and Eric Butler deceived their customers while at Credit Suisse by offering them auction rate securities that the customers were told were backed by federally guaranteed student loans, when they were actually being backed by subprime mortgage.

…

(Cont’d)

Oh Dear,
Leigh

http://www.rttnews.com/Content/Policy.aspx?Id=700842

Hey Left LA / In Chicago, looks like a unit in your building is going to foreclosure auction (at least I think it’s your building):

Unit #1602 is going to foreclosure auction this week. It is not currently listed on the market.

* Sold in December 2006 for $571,000
* Lis pendens filed in July 2007
* Foreclosure auction of $447,890

http://www.msnbc.msn.com/id/26527616/

“The Securities and Exchange Commission alleged in a civil lawsuit that two former Credit Suisse Securities brokers led corporate customers to believe that auction-rate securities being purchased in their accounts were backed by federally-guaranteed student loans and were safe like cash.”

Since this is a civil suit there is no possibility of jail time, correct?

A fun little anecdote, which indicates that the free spending, good times are over.

Disneyland will be having an event next month to celebrate Miley Cyrus’s birthday. They are going to close Disneyland early in the day and have a special ticketed event in the evening, limited to 5000 tickets. The price: a mere $250 per person.

Disney was expecting the event to sell out in minutes. To prevent scalping tickets will have the attendee’s name printed on them and they will check IDs.

So what happened? It didn’t sell out (not even close)! I guess Mom & Dad realize now that the HELOC is gone that they really can’t afford to shell out $500 or more so that one of them could take the daughter(s) to see Hanna Montana live at Disneyland.

GMAC slashing work force, reduces mortgage lending

GMAC Financial cutting 5,000 jobs, ceasing wholesale mortgage originations

http://biz.yahoo.com/ap/080903/gmac_financial_restructuring.html

FWIW I know that Treasuries will never, ever lose their AAA rating even in the event of a giant asteroid smashing into the USA or nuclear winter, etc. But it is interesting that they have to issue a denial.

NEW YORK (Reuters) - The top “AAA” debt rating of the U.S. government will probably stand firm despite the increased likelihood the Treasury may have to support home loan funding companies Fannie Mae and Freddie Mac Standard & Poor’s said on Tuesday.

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN0244967220080902

Fed: Slow growth, still-high prices hit economy

Given the fragile state of the economy, the Fed isn’t in a hurry to boost rates to fend off creeping inflation. A growing number of analysts believe the economy is likely to hit another dangerous rough patch later this year as consumers and businesses curtail their spending even more.

Heading into the fall, economic activity continued to be slow, the Fed said. Businesses described the climate as “weak” or “soft” or “subdued.”

Consumers, the lifeblood of the economy, showed caution. Shoppers “concentrated on necessary items and retrenchment in discretionary spending,” the Fed observed.

The Fed regions of Chicago, Dallas and San Francisco, for instance, reported noticeable declines in spending on clothing, electronics and jewelry. Sales of furniture and household appliances, meanwhile, were weak in most parts of the country — victims of the housing slump.

http://biz.yahoo.com/ap/080903/fed_economy.html

i see absolutly no good news comming from the FED. will wallstreet stage a late day rally on this bleak outlook?

ResCap in peace.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1Gr65hw_HbA&refer=home

“GMAC LLC and its Residential Capital LLC home loan unit plan to dismiss 5,000 employees, or 60 percent of the unit’s staff, and close all 200 GMAC Mortgage retail offices because of weak real estate markets.”

“Egan, who has a junk rating on GMAC debt, estimates the company may need to raise at least $10 billion to avoid failing in the next two quarters. With the mortgage unit struggling to originate loans and the auto-finance unit losing money, he doesn’t expect them to stay solvent.”

“One can relish the varied idiocy of human action during a panic to the full, for, while it is a time of great tragedy, nothing is being lost but money.”

John Kenneth Galbraith

Can the home-price bottom stay a year away forever? The graph that accompanies this piece shows prices going down steeply through April 2010, just in time for high end housing to get clobbered by the peak in Alt-A and prime resets. Why buy now if Da Boyz in the Street are predicting falling prices into the indefinite future?

September 3, 2008, 1:38 pm
Home-Price Bottom May Still Be a Year Away

Home Depot Inc. CEO Frank Blake told a Goldman Sachs retail conference that some recent housing trends indicate “we’re getting awfully close to the bottom” of the current correction, but economists at Credit Suisse say that one of the major metrics — home prices — aren’t going to reach lows for at least a year.

September 2, 2008, 3:59 pm
GOP Senator: Congress Could Use Econ 101

Sen. Robert Bennett (R., Utah) told a Minneapolis gathering hosted by the Financial Services Roundtable that the greatest urgency was to teach his fellow members of Congress is how to understand financial matters.

He said that lawmakers regularly confused the national deficit and the national debt, and many failed to grasp the concept of the debt to gross domestic product ratio, a key way of expressing the true state of a country’s finances. Bennett told the appreciative crowd that if the financial-services industry collectively educated lawmakers about financial issues, there was a chance that the level of debate on the campaign trail about economic matters might improve.

“That is your assignment, and you have until 5 p.m. this evening to complete it,” said Bennett.

If the housing price correction seems grim thus far, just wait until ARM recasts shift it into overdrive within the next couple of years.

September 2, 2008, 11:17 am
Fitch Pegs Housing-Price Pressure From Option ARMs

Fitch Ratings said Tuesday that U.S. pay-option adjustable-rate mortgages face dramatically increasing defaults in the coming year and beyond.

Option ARMs allow the borrower to make a low minimum monthly payment, usually for five years, and the difference between the minimum payment and the full payment is added to the mortgage balance. At the five-year mark, the loan terms reset and the mortgage payment increases to ensure full payment of the loan by maturity. The higher payments mean many option ARM borrowers will be left unable to afford their homes, and increased defaults will likely exert more downward pressure on house prices.

Of the $200 billion of option ARMs outstanding, Fitch expects $29 billion to recast by the end of 2009 and another $67 billion to recast in 2010. The potential average payment increase on those recasting loans is 63%, or an extra $1,053 a month, on top of the current payment.

Does anyone understand what’s going on with financial recently? Is this just a bear-trap rally? Sure seems like the bad news can’t be all out yet, but they’re going up and up.

Hoz, any opinions?

Sorry if this is a re-post; first copy didn’t show up even after a couple of hours.

Roll over and play dead for me…

The 3-headed hound from hades is on auto-destruct.

Sales are 34% off from this time last year~

After Ospraie, more hedge fund closures look likely
Wed Sep 3, 2008 11:32am EDT

By Laurence Fletcher

LONDON, Sept 3 (Reuters) - The closure of Ospraie Management LLC’s flagship hedge fund is likely to be the first of several such failures, as a slump in commodities and a spike in financial stocks catch out funds with hard-to-sell positions.

Five years of soaring commodity prices have encouraged a flood of investor assets and a raft of new hedge funds, which have sought investment opportunities in an increasingly crowded sector.

However, the recent setback in commodity and energy prices, driven by concerns demand for resources will suffer as economic growth slows, has seen many managers take substantial hits.

Those in illiquid positions face the biggest headache as nervous investors look to withdraw their money at the first opportunity.

“I think there will be more problems,” said one fund-of-hedge-funds manager who requested anonymity in order to speak candidly. “It will be an issue for hedge funds with quarterly redemptions who have gone into illiquid positions.

“It was not too dissimilar to the dot-com boom, where larger players bought a lot of smaller companies without too carefully considering them, (although) there is underlying value in the commodity and energy sector”.

pricing power theory testing.

if you have commodities going lower, housing going lower, wages going lower, incomes going lower, equities going lower, inflation expectations lowering….

you cant raise prices on goods or services. you can only eliminate debts and reduce costs. Thats a feedback loop thats not in the radar spectrum…this is the disconnect in the bond market…a flattened yield cureve works against the banks “getting well”.

The CB’s and SWF’s are confused and dont know what to buy, they themselves are about to send not only the short end, but the longer end lower (TREND FOLLOWING)…..does this put a floor under housing? NO, only higher mortage rates can accomplish that task…thus, the disconnect.

The pricing power in housing will ultimately be the leading indicator of the bottom, but at the lowest end of the spectrum (it will be all about price and nothing to do with interest rates)…ergo:

The future looks more llike the past……Shillers solution from the hoz post above…..”calling for a new federal agency modeled on the Home Owners’ Loan Corp., created in 1933 to refinance mortgages and keep people in their homes. One of the best things about this agency was that it was designed to be temporary…”

Good News from North of the Border… Vancouver, BC finally cracks… Prices down 4.3% in 3 months!

Big drop in Lower Mainland home sales

‘This summer, sales went off a cliff,’ says urban economist
Derrick Penner, Vancouver Sun
Published: Wednesday, September 03, 2008

The turn of the Lower Mainland real estate market’s cycle has been more dramatic than expected with real estate boards reporting another drop in sales and slide in prices at the end of August.

In Greater Vancouver, August Multiple Listing Service sales were down almost 54 per cent to 1,568 units, compared with 3,348 units in the same month a year ago.

So-called benchmark prices across Greater Vancouver in August, while still up from 2007, continued their slide from May.
Multiple-Listing-Service sales were down almost 54 per cent to 1,568 units in Greater Vancouver, from 3,348 units in the same month a year ago.

The typical Metro Vancouver detached home sold for $737,985 in August, down 4.3 per cent from May. The typical apartment, at $374,366, was down 3.9 per cent. The typical townhouse, at $463,433, was down 3.2 per cent.