The Collected Works of Author and Blogger Larry Roberts

Archive for March, 2014

Institutional buyers of real estate to hold as rentals abruptly slowed down in early 2014 due mostly to higher real estate prices harming returns. Single-family homes became an institutional asset class with the collapse of the housing bubble. Previously, it was too difficult to acquire a large number of single-family homes at prices that provided attractive returns. Typically, owner-occupants bid up prices far too high, and the increased management costs make returns far less than multi-family projects. Since the housing bust concentrated foreclosures in certain markets, and since prices were so low that cash yields greatly exceeded multi-family, private equity groups plunged into these markets and acquired large portfolios of homes. From the beginning the naysayers were out in force.…[READ MORE]

Loan modifications removed distressed inventory from the MLS, bottomed house prices, revived homebuilding, and resuscitated the economy. Government and lender solutions to the collapse of the housing bubble focused on loan modifications and short sales. Back in 2011 when banks went “all in” betting on success of loan modifications, it was widely believed that loan modifications would reverse declining house prices and make distressed borrowers happy by keeping them in houses they couldn't otherwise afford. This in turn would cause home prices to bottom, put homebuilders back to work, which would improve the economy by increasing employment and private-sector spending. It has worked as planned, but is that a good thing? Loan modifications succeed at a cost. Successful loan modifications require…[READ MORE]

House prices rise faster than incomes forcing first-time homebuyers to pay more from their income to buy a house. Marginal buyers are priced out. realtors often try to scare potential buyers into action by instilling the fear that they will be priced out forever. This is most effective when house prices are rising rapidly and affordability is plummeting, much like it is today. It isn't possible for first-time homebuyers to be priced out forever because they are the foundation of the housing market; however, with a heavily manipulated market, first-time homebuyers can be priced out for a significant period of time -- either that or be forced to overpay in a potential housing bubble. I think it unlikely the reaction…[READ MORE]

Contact us before you register with the builder we will accompany you to the registration and refund you anything over 1.5% offered by the builder. A village so unique, there will never be another opportunity like it in Orange County A place of such dramatic topography and natural beauty, Orchard Hills will be distinguished as a true landmark village. Conveniently located at Culver Boulevard and Portola Parkway in Irvine, discover a setting reminiscent of European countrysides and an elevated location set against the majestic backdrop of Loma Ridge. Rolling hillsides, acres of open space and proximity to working avocado groves will highlight the village's rare natural splendor and serenity. Brand new luxury neighborhoods will epitomize sophistication and architectural differentiation.…[READ MORE]

GSE reform plans call for an FDIC-like entity to regulate insurers and maintain a fund to insulate taxpayers from losses in a catastrophe. Between the GSEs (Fannie Mae and Freddie Mac) and the FHA, the government directly backs more than 80% of loan originations in the United States. Despite recent profits from the GSEs, Congress recognizes the need to reform these entities and reduce the liability now assumed by the US taxpayer. Unfortunately, they face powerful lobbyists who want to preserve these guarantees and make risk-free profits originating bad loans. Two Senators recently unveiled their plans to reform the GSEs, and although there is much uncertainty about passage, the thinking behind their reforms is good. If they can overcome the…[READ MORE]

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