The Collected Works of Author and Blogger Larry Roberts

Archive for February, 2012

I found a new hero online: Steven Greenhut, vice president of journalism at the Franklin Center for Government and Public Integrity. As a fellow displaced Midwesterner, he was shocked and appalled at what he witnessed moving to California. He too is buying up rental homes in beaten down markets for the cashflow. He recently wrote an editorial on Bloomberg that is today's featured article. Mortgage Deal Props Up California House of Cards: Steven Greenhut By Steven Greenhut Feb 9, 2012 8:06 AM PT Why should a taxpayer in Houston or Wichita bail out irresponsible California homeowners, banks and the state’s public employees’ retirement fund? Why should anyone bail out California loan owners? Why should anyone bail out the fools who…[READ MORE]

Over the last few years, I have decried efforts from crony capitalists to corner the single-family REO market by negotiating bulk sales directly from lenders or the GSEs. I still believe individual investors have a large role to play in cleaning up the mess, but after contemplating how large the problem really is, I am far less concerned that crony corporations could buy enough to impact the market. In California alone, each month lenders take back nearly $2 billion in single-family properties. They have a standing inventory of about $30 billion. They only obtain $2 billion a month because that's all they can sell on the MLS, and they are trying not to increase their inventory. How many REO? There…[READ MORE]

Pessimism pervades the housing market. Every major group with credibility that analyzes the housing market is predicting further price declines. The only group forecasting price increases is the the NAr (PDF of NAr forecast). What a surprise. The clueless shills at the NAr couldn't bring themselves to give an accurate forecast, so instead they manipulated the numbers to come up with a tiny price increase in 2012. In addition to the eight groups projecting price declines (S&P Case-Shiller -3.7%, LPS -4.8%, FHFA -1.8%, FNC -4.6%, CoreLogic -4.3%, Radar Logic -7.1%, Clear Capital -2.2%, Zillow -4.6%), I have forecast a -1% to -4% decline in local prices primarily due to upcoming lender supply. The tenth forecaster predicting lower prices is Fiserv.…[READ MORE]

A new study shows a strong correlation between house prices and birth rates. When the housing bubble inflated, so did... well, birth rates. When housing went flaccid, so did... birth rates. When housing began to inch up in 2009, so did... birth rates. The correlation is so strong, studies postulate a cause and effect. So I ask you, did loan owners stop having sex due to the housing bust? Housing Bust, Baby Bust Fertility falling: And baby makes three. The collapse in the housing market is bad for fertility, which could imperil long-term economic growth. By Jim Tankersley Updated: February 4, 2012 | 9:34 a.m. February 2, 2012 | 6:00 p.m. Say you bought a sprawling ranch-style house in 2007,…[READ MORE]

Interest rates are at record lows, and prices are at or below rental parity in most markets, yet demand is low and sales volumes are weak. Most real estate shills blame intransigent buyers. Many realtors believe legions of buyers are fence-sitting due to falling prices. In their world, if buyers could just be cajoled into buying, everything would be okay. The main reason buyers aren’t buying is because they can’t. The buyer pool has been depleted by the recession. Fewer buyers qualify for loans because they have bad credit from excessive debt loads or a recent foreclosure or short sale. Plus, few people have the requisite down payments to buy a house at California prices. Prices are now affordable on…[READ MORE]

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