The Collected Works of Author and Blogger Larry Roberts

Archive for July, 2015

The monthly housing market reports will now be made available for direct download with these weekend posts. If you want access to all reports and the archives, please register with the site and visit the Subscriber’s Reports page. Historically, properties in this market sell at a 25.7% discount. Today's discount is 34.2%. This market is 8.5% undervalued. Median home price is $268,100 with a rental parity value of $399,400. This market's discount is $131,300. Monthly payment affordability has been worsening over the last 1 month(s). Momentum suggests unchanging affordability. Resale prices on a $/SF basis increased from $174/SF to $176/SF. Resale prices have been rising for 4 month(s). Over the last 12 months, resale prices rose 3.5% indicating a longer…[READ MORE]

Peace-of-mind in retirement is attainable, affordable, and priceless. Stable income streams do more for us emotionally than does a large but shrinking pile of money. We are all born needing a lifetime of cashflow to meet our needs and wants. Except those lucky few born to parents who provide a lifetime of income, everyone else takes a job, and spends the majority of adult life working to pay the man. At some point each worker looks at when they will get Social Security and how much it provides. The timing and amount of Social Security is critical to retirement decision making as it's the last remaining source of stable cashflow for many retirees when they reach retirement age. Though many…[READ MORE]

Restoring peak housing prices required record low mortgage rates during a period of weak growth and a falling home ownership rate. It's time to celebrate! National home prices reached the peak of 2006. Surviving homedebtors are regaining equity, surviving lenders have collateral backing behind the bad debt they've preserved for the last decade, and new homeowners are stretched to the max to repay the bad debts of previous generations, albeit at lower rates. Since the housing market peaked in 2006, the powers-that-be resisted the price decline with a variety of government relief programs, and most importantly, record low mortgage rates. The recession caused by the 2006-2009 housing market crash left many people unemployed and underemployed, removing their demand from the…[READ MORE]

Dodd-Frank effectively regulates the mortgage market and greatly restricts the proliferation of unstable loan products that harm both borrowers and lenders. In the post, Dodd-Frank prevents lenders from inflating another bubble, I detailed the impact Dodd-Frank had on the housing market. Today, I want to look at the impact Dodd-Frank has on the mortgage market, the mechanism by which Dodd-Frank prevents future housing bubbles. When Congress took on the task of regulating the excesses of the mortgage industry, it ostensibly wanted to prevent a recurrence of the housing bubble. To that end, they passed the Dodd-Frank finance reform. One of the provisions of Dodd-Frank was to establish a “qualified mortgage” that establishes the parameters of what constitutes a “safe” mortgage…[READ MORE]

Paying off a promissory note early removes the mortgage encumbrance and turns a real estate borrower into a property owner. Most people realize their dreams of home ownership when they borrow hundreds of thousands of dollars to purchase a house. This is not ownership; it is debt slavery. People don’t own the property until the debts are retired, and true home ownership is the reward for those who master paying debts faster. Affordability is a measure of people’s ability to raise money to obtain real estate, a function of financing. During The Great Housing Bubble, financial innovations dramatically increased the amounts people were able to borrow; unfortunately, Affordability Products Make Prices Unaffordable. The affordability was short lived because the loan…[READ MORE]

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