The Collected Works of Author and Blogger Larry Roberts

Archive for June, 2014

Many wealthy and powerful people make Coastal California their home because of the weather, and they build companies and stimulate the economy. The local climate in Coastal California contributes to real estate value, but not because everyone wants to live here. By far the largest reason Coastal California house prices are so high is because there are many high-paying jobs and many wealthy businesspeople who operate businesses here. The climate is arguably as good in Tijuana, but Tijuana is not known for high real estate values. The most expensive real estate in the US is at the Hamptons in New York, but the climate there isn't very good at all. Perhaps it can be argued that successful business owners who…[READ MORE]

Russ Wetherill, June 7, 2014 The Cat in the Hat knows all about that. I read a story to my four-year-old every night before bed, often it’s a Dr. Seuss book. I’ve come to appreciate the wisdom of these parables, and find the common sense contained in these stories applies just about everywhere; even housing, where common sense isn’t as common as nonsense. This is the first article in a one-article series loosely related to Dr. Seuss and even looselier related to housing. In the classic Dr. Seuss style, I will be telling the stories entirely by rhyming … just kidding. Or am I? PART I – “Did I ever tell you how lucky you are?” This Dr. Seuss story,…[READ MORE]

Overall lending is up, particularly for HELOCs, but lenders are very choosy about who they lend money to, saying no to Ponzis. Lenders were burned by millions of borrowers running personal Ponzi schemes during the 00s. I documented thousands of cases of people borrowing and spending their houses during the housing bubble, and many others were running Ponzi schemes with credit cards and other debt instruments. Lenders had to endure painful write downs during the recession (as they should), so they are not eager to restart millions of individual Ponzi schemes and lose billions of dollars again in the next recession -- or at least they should be worried about giving away free money, but maybe they aren't.... Borrowers Tap…[READ MORE]

No matter how bad housing market conditions look, inventory restriction engineered by lenders will keep prices up and prevent a crash. Back during the financial mania, I enjoyed writing about the upcoming housing crash. As with any mania, people were irrational, and nobody wanted to believe a catastrophe was right around the corner, and people like me who sounded the alarm were dismissed as doom and gloomers who didn't know what we were talking about. Some writers are naturally bearish, and they enjoy the outsider role. Most often they are ridiculed on the fringe until a financial collapse vaults them to prominence. Many people thought I was a permabear until 2010 when I started telling people to buy Las Vegas…[READ MORE]

With the elimination of toxic mortgage products, high prices cause demand to falter, as it should; it also signals new mortgage regulations work as planned. Everyone wants to buy a home and see it go up in value. Most people assume the greater the increase the better because they don't want to believe there is a natural limit to home price appreciation determined by income growth. During boom times, people blithely assume the magic appreciation fairy doles out free money with no end in sight; however, that free money was created by the last buyer in the neighborhood establishing a new comparable sales value for everyone. Everyone cheers the new comparable sale while the last borrowers who set that value…[READ MORE]

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