The Collected Works of Author and Blogger Larry Roberts

Archive for September, 2015

September and October provides an abundance of motivated sellers and fewer competing buyers, making it the best time of year to shop for a home. "It's always a good time to buy or sell a house" anonymous realtor “They deem him their worst enemy who tells them the truth." Plato realtors proclaim that it's always a good time to buy or sell a house because it's always a good time for them to earn a commission. The reality is there are some times when markets favor sellers and some times when markets favor buyers. It can't simultaneously be a good time to buy and a good time to sell. During the housing bubble rally, the housing market strongly favored sellers.…[READ MORE]

When sleazy attorneys help deadbeat homeowners obtain free housing, everyone else pays a price through low housing inventory and higher home prices. Human interest stories need heroes. We are supposed to feel empathy for the aggrieved party that overcomes tough obstacles or intransigent people to achieve a victory for themselves and justice for us all. But have you noticed that the human interest stories from the housing bubble have no heroes? The housing bust brought out the worst in mankind. Everyone involved sought to avoid any financial responsibility and looked for ways to game the system to their advantage. Banks lobbied for (and obtained) massive bailouts. Homeowners begged for principal forgiveness and loan modifications, and when they didn't get what…[READ MORE]

In its simplest form, a personal Ponzi scheme is borrowing money to pay debt service: acquiring new debt to pay old debt. It’s a path to disaster. Carpe diem -- "Seize the Day" -- The first Ponzi Have you ever wondered why people make foolishly irresponsible financial decisions? Sometimes the mistakes are made in ignorance as people learn from their own mistakes, but sometimes this ignorance is willful and people don't want to learn a truth that might adversely impact their pursuit of short-term gratification. People make bad financial decisions because they want to pursue their short-term (and short lived) pleasures at the expense of long-term goals and wants. People want instant gratification, and lenders learned to use this instinct…[READ MORE]

Rising mortgage rates are a mechanical limitation that offers no respect to consumers' attitudes one way or the other. Buyer psychology matters, but not as much as the math of mortgage financing. Whatever happens to mortgage rates, people will still shop for homes, and they will still want to buy. Higher mortgage rates will force them to borrow less irrespective of the borrower's attitude. So while it may be interesting to note whether or not rising mortgage rates influence homebuyers' attitudes, it's completely irrelevant to how much they can borrow to buy a house. If mortgage rates go from today’s 4% to 5%, it will require a huge increase in aggregate wages to compensate. For example, each $100,000 of borrowing…[READ MORE]

Historically, properties in this market sell at a 18.5% discount. Today's discount is 21.9%. This market is 3.3% undervalued. Median home price is $307,000 with a rental parity value of $395,000. This market's discount is $88,000. Monthly payment affordability has been worsening over the last 4 month(s). Momentum suggests worsening affordability. Resale prices on a $/SF basis increased from $171/SF to $172/SF. Resale prices have been rising for 6 month(s). Over the last 12 months, resale prices rose 3.5% indicating a longer term upward price trend. Median rental rates increased $16 last month from $1,758 to $1,775. The current capitalization rate (rent/price) is 5.6%. Rents have been rising for 12 month(s). Price momentum signals rising rents over the next three…[READ MORE]

Page 2 of 6123456