The Collected Works of Author and Blogger Larry Roberts

Archive for August, 2011

I was sitting in a meeting not long ago with a group of homebuilding industry insiders. During our discussions, the topic of future home prices came up, and I was astounded to hear the assembled group say they wanted to see the market props removed so that house prices could fall to a level that clears the market. The people who make a living from real estate are finally waking up to the idea that artificially high house prices is hindering sales, making acquisition decisions problematic, and ultimately delaying the recovery of the homebuilding industry. My only comment was "Halleluia." I preached that gospel for 3 years to no avail, and suddenly people came to the same conclusion on their own. There comes a point when you have to give…[READ MORE]

Anyone who has ever done any self promotion knows how difficult it can be. The little voices of doubt inside work to keep you down. "You're not that good." "You don't know what you're doing." "You can't succeed." When those voices become a paralyzing distraction, you need to go look in the mirror and say, "Hot damn, I'm great." California realtors have launched a new promotional campaign. To judge by the videos they produce, you would think they are great. And some are, but many are not. I always enjoy a little parody to remind us of the dark side. Calif. Realtors Launch Testimonial Campaign by Tanya Irwin, Thursday, August 25, 2011, 5:04 PM The California Association of Realtors is launching an integrated…[READ MORE]

Real estate investors during the housing bubble put their money to work on faith. There is no logical reason to believe house prices only go up. In fact, there have been two prior periods in California's recent history where house prices did, in fact, go down. However, with kool aid intoxication, otherwise known as faith-based investing, reality is ignored. If you truly believe house prices only go up, no price is too high, and you don't have to worry about a backup plan if house prices don't go up. There is only one viable backup plan when a speculative play on appreciation does not pan out: renting the property until you get out at breakeven. For some people, this was…[READ MORE]

There is an old saying in investments: the herd is always wrong. This is only partially true. The herd is wrong about 80% of the time, and for a short time, the movement of the heard makes it right. However, once the herd has taken a position and nobody is left to buy, the herd realizes their mistake and panics to get out causing epic financial disasters. The latest movement of the herd is into apartment development. As the only asset class related to real estate that makes sense for institutional investors, it stands to reason that some capital flows are warranted. However, in our era of cheap money, more than a little capital is flowing into apartment development. Cheap…[READ MORE]

Home is not an address, it is a state of mind. I felt "at home" growing up. I lived in a small community with my parents and extended family. I had roots which ran deep. My family owned their property, subject to a conventional mortgage which they dutifully paid off. The thought of losing the family home never crossed our minds. My parents never did anything to imperil it. I bought my first home at 29. I bought a lot and contracted its construction. I overbuilt and over-borrowed, and when I had to move to take a job, I had to sell for a loss. I wrote a check at the closing table. Nobody had heard of a short sale…[READ MORE]

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