The Collected Works of Author and Blogger Larry Roberts

Archive for January, 2012

Rents are rising again. In fact since turning positive in late 2010, rents have been rising steadily and consistently in a healthy range. This is a sign of an improving economy. It's also one of the reasons rental parity calculations show improvement. Unless the US economy slips back into recession, rents will not turn negative again. As long as rents go up and prices go down, affordability will continue to improve. Renter Nation Rages On As New Reality Published: Thursday, 5 Jan 2012 | 12:52 PM ET By: Diana Olick -- CNBC Real Estate Reporter Despite record low mortgage rates reported todayand rising affordability in most U.S. housing markets, rent is the new reality for former home owners and new…[READ MORE]

Many loan owners quit paying their mortgages years ago. They enjoy a free ride while the banks wrestle with what to do with their bad loans. If the banks process their foreclosures, they must recognize the losses, and the resulting sales will find their way to the MLS. Typically, about one-third of all foreclosures go to third parties at auction. Even if lenders hold all their REO for better days, the third-party auction buyers will sell most of theirs. The result will be more homes on the MLS and lower prices. If the banks don't process their foreclosures, they will be giving away free houses. Loan owners are predictably excited about that idea, but the bondholders and shareholders of the…[READ MORE]

Affordability in many markets is at record highs. Even here locally, houses are more affordable on a monthly payment basis than any time in the last decade. Yet, houses are not selling. Why is that? Income growth is stagnant due to the weak economy and job picture, the housing wealth of the entire nation has all but evaporated, and many potential home buyers have high debt burdens from a combination of student loans and rampant credit-card borrowing during the 00s. In short, everyone is tapped out. Last week I spoke of my disdain for most economists. Nouriel Roubini is another of the group whom I respect. Don’t Believe the Good News Consumers are income-challenged, wealth-challenged, and debt-constrained. That doesn’t bode…[READ MORE]

Borrowers who owe more on their mortgage than their house is worth and who are paying more each month than a comparable rental benefit financially from strategic default. Few dispute that. The arguments against strategic default appeal to ethics and morality, and the counter-arguments either deny there is a moral component or argue that the greater moral duty is to the family. There is one financial argument against strategic default: the house will go up in value, and by defaulting now, the borrower will not obtain that appreciation equity in the future. The appreciation argument is a fantasy. Prices are currently falling, and with the abundance of inventory which needs to be cleared from the system, there is little hope…[READ MORE]

Laguna Altura is an Irvine Company Village located at the intersection of Highway 133 (Laguna Canyon Road) and Interstate 405. The proximity to the Irvine Spectrum and nearby offices are ideal for local workers who desire a short commute. The ease of access to Interstate 405 and Interstate 5 cuts down the commute time of anyone working at a greater distance. This adjacency to the freeways does make the community a bit noisy despite efforts to buffer the sound. Further, the main entrance is on Laguna Canyon Road, a busy thoroughfare bringing traffic from Laguna Beach and other south county commuters linking from the 73 toll road. The traffic situation at the entrance is less than ideal. The Village has…[READ MORE]

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