The Collected Works of Author and Blogger Larry Roberts

Archive for February, 2012

Since early last fall, I noted increasing affordability relative to rents. It's now cheaper to own than to rent in many OC markets and most housing markets around the country. However, rental parity is a measure of affordability comparing one method of providing housing versus another. Rental parity does not capture the bigger picture of affordability relative to incomes. As it turns out, all housing is becoming less affordable as both owners and renters alike spend more on housing as a percentage of income than they used to. This is a troubling trend. If people are putting more toward housing, then they are spending less on everything else. Perhaps landlords and bankers like this trend, but people who produce other…[READ MORE]

Where did the resale supply go? Will declining resale inventories cause prices to go up? Conventional wisdom holds that lower resale supply translates to high home prices. The months-of-supply metric developed by realtors to instill panic in potential buyers is based on this conventional wisdom. But the reason for the lower supply matters. In an appreciating market, lower supply is caused by increased demand. Supply is absorbed which forces buyers to reach higher or accept less quality for the money. That isn't what we have today. Demand is largely unchanged. Increasing demand is not absorbing the inventory, and sales volumes are still well below historic norms. The reduced supply results from an increase in approved short sales and a delay…[READ MORE]

Many people bought during the housing bubble because they wanted a home for their families. They stayed within reasonable debt-to-income guidelines and used fixed rate mortgages. Unfortunately, the prudent were small in number, and most of them have obtained loan modifications to make their super-sized debts manageable. Many other people bought during the housing bubble because they saw their house as an investment, or worse a cash cow they could milk periodically to supplement their spending. These people saw rising house prices as a way to cash in on the American dream. They believed their houses would go up in value forever and provide them with everything their hearts desired. We see this as folly now, and a few of…[READ MORE]

Below is the Update for the OC Housing Market as of December 31, 2011. It is free to download. You can also sign up to have this report emailed to you on a monthly basis. [raw_html_snippet id="newsletter"] The Real State of OC Real Estate OC Housing News monthly market report and newsletter provides a clear picture of the health of the housing market. Both buyers and sellers find the information timely and relevant to their decision to buy or sell a home. The collapse of the housing bubble clearly showed valuation matters, and real estate does not always go up. If your new to this report, I suggest you start on page 45 with the Orange County housing market general…[READ MORE]

When I was young and much more liberal than today, people told me I would become conservative when I got older. I didn't think it would happen. But when I look at how far the pendulum has swung to the bailout-and-take-care-of-me side, I wonder if we haven't lost our way. Consumers outnumber producers, and everyone wants a free ride. Enough already. The 'Take Care of Me' Society is Wrecking the USA By MAUREEN MACKEY, The Fiscal Times January 28, 2012 You’ve played by the rules. Worked hard to put yourself through school. You’ve gotten a decent job and you pay your taxes. You’re faithfully paying down your mortgage and saving money in a 401(k) – all to secure your finances…[READ MORE]

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