The Collected Works of Author and Blogger Larry Roberts

Archive for August, 2013

An astonishing number of the 18-31 year age cohorts are living with their parents. This large group of young adults are not currently forming new households and stimulating housing demand. When they finally move out -- if they ever move out -- they will demand either rental housing or an ownership stake. Which way they go will have an impact on future house prices. Millennials, in Their Parents’ Basements By CATHERINE RAMPELL -- August 1, 2013, 11:00 am Last year, a record 36 percent of people 18 to 31 years old — roughly the age range of the generation nicknamed the millennials — were living in their parents’ homes, according to a new Pew Research Center analysis of Census Bureau…[READ MORE]

Like any industry that enjoys an undeserved government subsidy, the homebuilding industry is fighting to keep it. The home mortgage interest deduction does little to increase home ownership rates, particularly among low wage earners, but it does inflate housing prices, especially where high wage earners live. Homebuilders equate high house prices with greater profits and more homebuilding activity, so they are fighting to keep it despite the fact it is very costly to the US taxpayer and does little to boost home ownership rates. Supporters of the home mortgage interest deduction are very worried that Congress will curtail it in the debate over comprehensive tax reform. The National Association of Homebuilders is becoming increasingly vocal -- and increasingly desperate --…[READ MORE]

In the height of the housing bubble, banks were giving out loans to people with no jobs and no credit.  And then if equity increased in your house then the banks would offer you a HELOC loan that would allow the borrower to cash out their equity.  Then in 2008 the affordability products stopped and the ponzi scheme was over. Since the collapse of the housing market there has been types of  borrowing that has replaced the easy credit use to be at the banks for example: 401(K) loans, crowding funding scheme, farm land fraction sales,  pay day loans, auto title loans (so you can pay off your car twice), and even subprime auto loans that have interest rates greater…[READ MORE]

In early 2012 lenders embarked on a new policy of choosing loan modification and squatting over foreclosure. Their goal was to dry up the distressed inventory and create an imbalance between supply and demand that would force buyers to compete over limited inventory and drive prices higher. So far, they have been successful, and all signs are that this policy will continue to work as the banks intended. The truth as I've outlined above is not how bankers are portraying their actions in their own publications. According to their version of events, their can-kicking loan modifications and permissive attitude toward squatters who won't play their game are instead characterized as permanent solutions to a problem they've merely deferred to another…[READ MORE]

I was a housing bear. From when I started writing publicly about housing in February 2007 to September 2012, I was bearish on Coastal California real estate. In August of 2010, I wrote the post Buy Las Vegas real estate, which made the case for buying cashflow assets in beaten down markets. I was and still am very bullish on properties in these markets. Because I was completely bearish for four and one half years, and because I continue to point out the bogus manipulations of the market, some people classify me as a permabear. The reality is that since last September, I have discussed in numerous posts the reasons prices will continue to rise despite the manipulations of the…[READ MORE]

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