The Collected Works of Author and Blogger Larry Roberts

Archive for March, 2014

Many housing market analysts erroneously believe loan amortization will rescue underwater borrowers. Many loan modifications don't amortize, so those borrowers are not reducing their debts. When borrowers owe more on their house than it's worth, they are underwater; that's a problem because they can't sell and move when they want. About 20% of Americans are underwater on their mortgage, and another 15% to 20% can't sell for enough to pay off the mortgage and provide equity for a subsequent purchase. The lack of borrower equity hinders housing because it prevents those who are underwater from listing and selling their homes -- hence the low inventory today -- and it weakens demand in the move-up market because move-up equity doesn't exist.…[READ MORE]

Republican tax reform proposal lowers marginal rates by eliminating nearly all home ownership subsidies. I recently wrote that potential home ownership subsidy changes would flatten Coastal California house prices because our housing markets are directly supported by a combination of all these subsidies. Reducing or eliminating them would make owning a home much more expensive and thereby much less desirable. There's no question home ownership subsidies inflate house prices, and there's mounting evidence it does little to increase home ownership rates or improve communities. Given the high cost to the government, $121 billion in 2013 alone, it's a costly subsidy with dubious benefit -- a perfect target for tax reform. Tax reform proposal would cut many real estate deductions Many…[READ MORE]

The new mortgage regulations curtailed affordability products previously used to sustain sales volumes when prices became too high. The new mortgage regulations will prevent future housing bubbles (we hope), but we are witnessing the success of these new regulations in a surprising change in housing market behavior: high prices are hurting sales volume. Housing economists' conventional wisdom states that rising house prices creates "escape velocity" as potential homebuyers become more motivated, they compete with one another, and they drive prices higher. The motivation may be there (kool aid is eternal), but the key enablers of this behavior are unable to play along; the new mortgage regulations curtailed affordability products. When prices get too high and potential buyers can't afford what…[READ MORE]

The housing market remains flat on low volume during the he fall and winter of 2013/2014. Housing bulls expect a brisk spring rally with increasing sales; housing bears expect flat pricing on low volume. The Orange County housing market is unchanged from last month, actually unchanged for the last five months. The Median in September 2013 was $531,100, and the median in February 2014 is $532,100; the median hasn't fluctuated more than $2,000 during that entire period, as house prices are limited by affordability constraints. The current OC median home sales price is comparable to mid-2004 price levels and significantly below the peak. Given the constraints on affordability, a rapid reflation of the bubble to peak price levels seems unlikely.…[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. Baker Ranch is the largest of the New Neighborhoods set amidst rolling hills with a beautiful backdrop of majestic mountain vistas. Approximately 2,379 single-and multi-family Spanish and Mediterranean style homes with varying floor plans are currently being constructed. Model homes are now available to the public for viewing. Providing ample opportunities for recreation and relaxation is part of the Baker Ranch vision. Community members will have a wide variety of options to choose from with amenities ranging from private recreation centers complete with swimming pools to neighborhood parks with a baseball field and a full…[READ MORE]

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