The Collected Works of Author and Blogger Larry Roberts

Archive for April, 2012

Lenders are withholding inventory across the Southwestern United States in hopes of creating a shortage of supply to reverse the downward spiral in home prices. Lenders constantly try to balance two competing forces. First, lenders need to get their money back. Dead money tied up in non-performing assets does not contribute positively to their bottom line. Further, this money also cannot be used to fund ongoing operations. This puts enormous pressure on lenders to liquidate and put their capital toward a productive use. On the other hand, if they liquidate too quickly, house prices go down which reduces the amount of capital they recover. Taken in the context of all their holdings, declining asset values wipes the equity from their…[READ MORE]

Each month I publish the OC Housing Market Newsletter below and send it to subscribers. A few weeks later, I publish in on the blog. To get the most timely data, please sign up below. The data in this report will help you identify which cities, zip codes or communities with the best pricing. You can explore prevailing rent levels, resale pricing and trends in both. It's a valuable resource for anyone looking to buy a home in today's volatile and unpredictable real estate market. [gview file="" height="675" width="550" save="1"] [raw_html_snippet id="closing"][READ MORE]

Stonegate is an Irvine Company Village located northeast of Woodbury bounded by Sand Canyon Avenue, Portola Parkway, Jeffrey Road, and Irvine Boulevard. Stonegate has easy access to Highway 133 which provides speedy access to I-5 and I-405. The entire Village is far enough from the major freeways to be very quiet, particularly locations distal from the bounding arterial streets. The only problems with traffic or noise comes from the steady stream to garbage trucks driving up Sand Canyon and down Portola heading to the Bee Canyon landfill. The landfill itself is over the mountain nearly two miles from the housing development. Odor or groundwater contaminants should never be a problem. The Irvine Company developed Woodbury as the premium community in…[READ MORE]

Anyone who watches the market carefully knows that lenders are withholding supply to cause prices to bottom. This is in the best interest of the members of the banking cartel. It's surprising to me they managed to pull it off. Cartels are inherently unstable, most often because each member has a strong incentive to cheat by increase supply to take advantage of the improved pricing. In my opinion, that is what will likely cause the engineered spring rally of 2012 to fail. Calculated Risk famously described the problem facing homebuilders in the wake of the housing collapse in his analysis of the "distressing gap." Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. The…[READ MORE]

For the last four years the health of the American banking system has been an illusion. In 2008 our insolvent banks were deemed too-big-to-fail, and regulators began allowing banks to market their assets to a fantasy valuation rather than fair-market value. Once insulated from loss recognition, lenders embarked on a policy of amend-extend-pretend with delinquent borrowers. Never before have so many been allowed to squat in luxury for so long. The policy of mark-to-fantasy bank accounting was necessary to make our banks look solvent. The hope was that banks would earn their way back to health as the federal reserve took the interest it used to pay retirees and instead diverted it to its member banks. The ongoing bailout of…[READ MORE]

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