The Collected Works of Author and Blogger Larry Roberts

Archive for February, 2014

People change their views on rising house prices. Rather than cheering an endless increase, they worry about another decline. Economists and politicians almost universally accept that everyone wants to see rising house prices. Having written for seven years to an audience of prospective homebuyers, I can attest that some people don't want to see perpetually rising home prices -- at least now while they're shopping for a home. The severity of the last housing bust destroyed the central myth concerning rising house prices: real estate prices do not only go up. Once people realized housing was not the safe investment they thought it was, their enthusiasm for owning declined precipitously -- as it should. The obvious suddenly hit everyone in…[READ MORE]

Jacobim Mugatu, 2/15/2015 To me, this “real estate recovery” has been nothing but a false front, a Potemkin village – the kind that the residents of Rock Ridge built to thwart Hedley Lamarr and his villains from taking over in “Blazing Saddles”. From artificially restricted inventory to unsustainable low interest rates, home prices have bubbled up well past an affordable level for all but those with stratospheric income. The rise of all cash sales – nothing more than money laundering sourced from every corner of the globe – has destroyed real price discovery and the velocity of true market demand. When you listen to those in the real estate industrial complex, none of the aforementioned issues are the cause of…[READ MORE]

Activists plead for reinstatement of the tax break on forgiven debt that expired at the end of last year. The value of the forgiven debt is now taxed as income -- as it should be. Congress likes to provide tax breaks and subsidies to encourage certain activities and dissuade others. There is a simple truth about taxes: any activity that is taxed will diminish, and any activity that is subsidized will increase. Do we want to see more more irresponsible borrowing? If so, then we should forgive debts and fail to tax the free money as income. That's what some activists are proposing. I believe forgiven debt should be taxed, particularly on mortgage equity withdrawal. Did borrowers deserve a tax…[READ MORE]

Home prices rise, but investors pull back, home sales drop, household formation craters, mortgage applications decline, and the federal reserve frets over weak job growth. We won't know whether or not the recovery died last year until the spring numbers come in, but suffice to say, right now, the recovery looks shaky at best. Rising house prices are generally a side effect of a strong economy. A strong housing market recovery would witness rising home sales, rising household formation, increasing purchase applications, rising wages, and employment growth -- not just rising prices. Right now, all we have is rising prices, and the lack of fundamental support is good cause to question the strength of the so-called housing recovery. Anyone who…[READ MORE]

The former political leaders in Irvine, California, squandered $200,000,000, then ordered their partners-in-corruption to cover up the details of no-bid contracts and other political largess. I am not politically partisan; I bash corruption and incompetence from either party. Local politics often renders political partisanship meaningless; for example, political party registration strongly favors Republicans in Irvine, yet Democrats controlled Irvine's city council for many years. When Sukhee Kang took a shot at US Congress last election cycle, the Irvine Democrats couldn’t field a replacement strong enough to keep control. Once Republicans gained control, they embarked on an investigation of the ruling Democrats activities concerning the Irvine’s Great Park boondoggle that blew $200 million. What they turned up is a portrait of…[READ MORE]

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