The Collected Works of Author and Blogger Larry Roberts

Archive for 2015

Historically, properties in this market sell at a 9.5% discount. Today's discount is 17.7%. This market is 8.1% undervalued. Median home price is $475,100 with a rental parity value of $578,200. This market's discount is $103,100. Monthly payment affordability has been improving over the last 7 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $390/SF to $394/SF. Resale prices have been rising for 2 month(s). Over the last 12 months, resale prices rose 9.5% indicating a longer term upward price trend. Median rental rates increased $15 last month from $2,486 to $2,501. The current capitalization rate (rent/price) is 5.1%. Rents have been rising for 12 month(s). Price momentum signals rising rents over the next three…[READ MORE]

Mark Hanson believes the reflated housing bubble will also pop. I think we won't see any significant price deflation going forward. The housing bears have not completely gone away. Zero Hedge, Keith Jurow, and Mark Hanson remain bearish, and they provide some of the most compelling bearish arguments in the national conversation. Mark Hanson is the Rodney Dangerfield of housing market economists; he doesn’t get much respect. John Burns, the local darling of the MSM, once said, “I give him zero credibility.” Ouch! So when Mark Hanson argues the US is enmeshed in housing bubble 2.0, he’s dismissed as a perma-bear or a headline grabber who gets on TV. Housing pundits who don’t share Mark Hanson’s views find it easy…[READ MORE]

Young people and lower-income households can't afford the high house prices in California, forcing many to move out of state. Yesterday I provided an update on the local housing market. The data in my reports show the market is relatively affordable, but this affordability is not spread equally across all buyer categories. Due to the chronic shortages of housing supply that inflates California house prices and rents, lower income and young buyers looking for entry-level housing find it very difficult to buy. So while California house prices are as affordable as they were in the 90s, since this problem has persisted since the 70s, entry-level buyers face the same problems today than they have for the last 40+ years. I…[READ MORE]

With increasing affordability from falling mortgage rates, expect increasing sales and increasing prices until rates begin to rise. Each month, I publish housing market reports for most of Southern California. The overview report covering the counties of Los Angeles, Orange, Riverside, San Bernardino, and Ventura is available to everyone in the Housing Market Reports page on this site. The individual county reports are available to registered users of this site on the Subscriber's Reports page. Also, on weekends I publish excerpts of these reports in posts for people who want an overview without downloading the reports. Since this is the prime season for buying and selling, I want to take a more detailed look at the local market to help…[READ MORE]

MLS Inventories are low because underwater owners and those will low equity aren't listing their homes. Back in 2011 lenders changed their loss mitigation policies. Rather than foreclosing on delinquent borrowers and selling the subsequent property as REO, banks made two major changes that dried up the MLS inventory: (1) lenders modified every loan they could and (2) lenders stopped approving short sales if the borrower had assets. By modifying loans and denying short sales, distressed inventory disappeared, buyers in the market competed with each other for scarce inventory, and prices rose rapidly. The simple fact is that low housing inventory is a direct result of the changes in lender loss mitigation policies. Demand has not picked up notably over…[READ MORE]

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