The Collected Works of Author and Blogger Larry Roberts

Archive for 2015

If mortgage rates remain low, home sales will strengthen and house prices will keep going up. There is much angst among potential homebuyers about rapidly rising prices and the potential for another housing bubble. The cheerleaders in the mainstream media are keen to squelch these concerns, and they argue that affordability is so good that rising rates won’t have much impact. This is where parsing the various markets is important. The pundits that claim we are in no danger of inflating a new housing bubble are right — in the weakest markets. Interest rates could double, and prices would still be relatively affordable in Las Vegas. That market is so undervalued that an uptick in mortgage rates won’t stop the…[READ MORE]

House prices and sales in 2016 depend almost entirely on what happens with mortgage interest rates "Those who have knowledge, don't predict. Those who predict, don't have knowledge." Lao Tzu Each year I like to make a real market forecast. I try to examine current conditions, consider how these conditions change, and form an opinion of how these conditions effect housing. It's the opposite of the trend extrapolation nonsense passed off as forecasting by most housing market analysts. I try to focus on areas where my forecast falls outside the consensus view. Regurgitating consensus cud doesn't make the analysts bolus any more palatable. The consensus opinion this year, like every year, is for sales and home prices to rise 3%…[READ MORE]

Homebuilders believe the feel-good nonsense printed in trade journals and industry media outlets and often rely on this information to make bad decisions. “Freedom is the right to tell people what they do not want to hear.” George Orwell As someone who worked in the homebuilding industry for over 20 years, I often drank housing kool-aid with my co-workers. Although I remained grounded enough to see the obvious housing bubble of the 00s, many of my co-workers refused to acknowledge it, sometimes with heated arguments. The homebuilding industry, like many others, has it’s own trade journals and industry news aggregators that keep people informed on happenings that impact the everyone who makes a living from home construction. But rather than…[READ MORE]

Historically, properties in this market sell at a 0.6% premium. Today's discount is 4.1%. This market is 4.8% undervalued. Median home price is $595,200 with a rental parity value of $614,400. This market's discount is $19,200. Monthly payment affordability has been improving over the last 2 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $391/SF to $392/SF. Resale prices have been rising for 10 month(s). Over the last 12 months, resale prices rose 4.6% indicating a longer term upward price trend. Median rental rates declined $10 last month from $2,757 to $2,747. The current capitalization rate (rent/price) is 4.4%. Rents have been rising for 12 month(s). Price momentum signals rising rents over the next three…[READ MORE]

Higher mortgage rates compensate investors for greater risks, leading to looser lending standards. For the last several years, the refrain from housing insiders has been that credit standards are too tight and should be loosened. Real estate industry lobbyists appeal to lawmakers for policies the real estate industry believes will promote more transactions at higher prices. Most often this myopic lobbying causes unintended long-term detrimental impacts on the housing market. In 2004 every realtor wish was granted: lending standards were loosened to the point of complete abandonment, and restrictions on the amount prospective buyers could borrow were also removed through teaser rates, liar loans, and negative amortization. In the short term, realtors reaped the benefits as transaction volumes escalated even…[READ MORE]

Page 4 of 641234567...203040...Last »