The Collected Works of Author and Blogger Larry Roberts

Archive for 2007

Over the last several years, buyers have not concerned themselves with the day they were going to become sellers. Why would they? There was an endless demand for properties, and buyers were going to pay whatever was asked. Those days are gone. They are not coming back any time soon. In one of my first posts, I talked about Financially Conservative Home Financing. There has been much discussion on these boards about the high debt-to-income ratios and adjustable rate mortgage terms now required if you chose to buy in today's market. For anyone considering buying a home right now, I would like you to think about the buyer who is going to buy your home from you at some point…[READ MORE]

Appreciation is Dead. It is not merely delayed for a temporary housing price crash only to resume its historic 7+% rate. Appreciation is dead. We will never see high rates of house price appreciation again in California. Sacrilege! Yes, but there are reasons to believe this may be true. In October of 2000, I attended a conference put on by TradingMarkets.com. The NASDAQ had experienced the spring collapse and summer bear rally. The huge fall sell-off (which was the first of many sell-offs before the bottom was reached in the spring of 2003) was just beginning. One of the speakers at this conference was a very successful hedge fund manager named Mark Boucher. Everyone gathered at the conference had just…[READ MORE]

Denial runs deep in the financial markets. The vast majority of participants either want or need prices to steadily increase. Any facts or opinions that run counter to the idea of ever increasing prices must be quelled in order to prevent a catastrophic collapse of prices due to panic selling. One of the more glaring examples of this phenomenon has been the slow leak of information regarding the upcoming debacle in our housing market. In February and March as the sub-prime lending implosion became front page news, market bulls were presented with a major public relations problem. It was imperative for the bulls to convince buyers the damage from subprime lending was "contained" and would not "spill over" into other…[READ MORE]

There was a recent article posted on MSN about mortgage companies working with hopeless borrowers to save their homes from foreclosure. This particular article is most likely part of a public relations campaign from the lending industry to show they are working on the problem. They are bracing themselves for the inevitable congressional hearings which will happen next year. There is nothing quite like an election year crisis to bring out congressional grandstanding by our leading politicians. But I digress... the MSN article got me thinking about what really could be done about the foreclosure problem. I have written in several posts about the serious foreclosure problem looming as several trillion dollars of mortgages reset to higher payments over the…[READ MORE]

Southern California is a beautiful place. The weather is perfect, there is a lot to do, and the people are generally friendly and keep out of your business. For those reasons and many others, I have chosen to make Southern California my home. However, Southern California is not perfect. The culture is infected with pathological beliefs that have led us to the huge problem with house affordability and the impending disaster in our real estate market. What do I mean by Cultural Pathology? There are certain beliefs if widely held and acted upon by a group of people leads inevitably to collective suffering and/or destruction. One example we all see is in the American auto industry. Before imports hit our…[READ MORE]

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