The Collected Works of Author and Blogger Larry Roberts

Archive for July, 2013

Every homeowner wants to see the resale value of their home go up as rapidly as possible. Since more than half the country owns a house, political pressure mounts to prop up home prices and cause them to appreciate. The result is a plethora of subsidies designed to make houses more expensive. The result of these subsidies and our ever-present desire for rapid home price appreciation is a great deal of house price volatility. Unfortunately, house prices can't appreciate faster than the wages go up to support them. Any time prices are artificially pushed higher, they inevitably crash back down with horrendous consequences. What's worse is that all this volatility can be avoided. If people accepted that house prices can…[READ MORE]

Many housing sub-markets in Coastal California have already reflated to affordability limits, and many are surpassing peak bubble prices. The beaten down housing markets of the Inland Empire (Riverside and San Bernardino Counties) have bounced significantly off the bottom, but they are still extremely undervalued by historic norms between rent and cost of ownership. The rising prices are turning off private-equity funds, but mom and pop investors can still find plenty of good deals with upside potential. Riverside County Riverside County, California, is directly east of Orange County. It's population exploded over the last 40 years as Los Angeles and Orange Counties were built out and house prices were pushed up by high wage earners to levels many could not…[READ MORE]

Large private-equity hedge funds will begin tapering their purchases of houses shortly. Prices have simply gotten to high, and with the flood of rentals from their previous purchases, rents are softening in many of the markets where these funds have been most active. Rising costs and declining income doesn't make for a good combination. However, despite the apparent worsening of conditions for this investment class, some housing analysts are worried that investors will remain too active and possibly overheat prices. Investor Momentum In The Housing Market May Have Swung Too Far John Burns, John Burns Real Estate Consulting Jul. 25, 2013, 6:51 PM During the downturn and early stages of recovery, we were huge proponents of investors taking advantage of…[READ MORE]

The number of new homes sold in June jumped to a 5 year high of 479,000 annualized purchases, in addition the median new home price was up 7% year over year.  This made headlines in in across the business news sphere as an strong indication that the housing market was coming back even though mortgages rates had their biggest increase since 1987 during the month of June.   These two facts were touted as evidence that rising mortgage rates would not affect home prices or sales.  So, all is well with the housing market...well not so fast. Almost immediately bloggers and analysts combed through the June data and found some interesting trends that was left off the initial broadcast reports…[READ MORE]

Every aspect of government policy toward housing is geared to benefit banking interests. For need to placate the public, many of these programs have been sold as a benefit to struggling borrowers loanowners. Since some people actually believe the false rhetoric about helping borrowers, politicians and bureaucrats have to feign surprise when these programs serve their banking masters and fail the general public. New Defaults Trouble a Mortgage Program By SHAILA DEWAN -- Published: July 24, 2013 Banks and other mortgage servicers have accepted $815 million in taxpayer-funded incentives for helping homeowners who have since redefaulted on their home loans, a watchdog for the Treasury Department’s Troubled Asset Relief Program, or TARP, reported on Wednesday. The banks found a way…[READ MORE]

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