The Collected Works of Author and Blogger Larry Roberts

Archive for May, 2015

Historically, properties in this market sell at a 25.7% discount. Today's discount is 35.4%. This market is 9.7% undervalued. Median home price is $261,100 with a rental parity value of $400,100. This market's discount is $139,000. Monthly payment affordability has been improving over the last 7 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $171/SF to $172/SF. Resale prices have been rising for 1 month(s). Over the last 12 months, resale prices rose 4.6% indicating a longer term upward price trend. Median rental rates increased $0 last month from $1,751 to $1,752. The current capitalization rate (rent/price) is 6.4%. Rents have been rising for 12 month(s). Price momentum signals rising rents over the next three…[READ MORE]

Debt-to-income ratios must be limited because beyond a certain point, rising debt service becomes a Ponzi scheme. In The Great Housing Bubble, I wrote about how we could prevent the next housing bubble: Loans for the purchase or refinance of residential real estate secured by a mortgage and recorded in the public record are limited by the following parameters based on the borrower’s documented income and general indebtedness and the appraised value of the property at the time of sale or refinance: All payments must be calculated based on a 30-year fixed-rate conventionally-amortizing mortgage regardless of the loan program used. Negative amortization is not permitted. The total debt-to-income ratio for the mortgage loan payment, taxes and insurance cannot exceed 28%…[READ MORE]

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