The Collected Works of Author and Blogger Larry Roberts

Archive for 2015

Historically, properties in this market sell at a 25.7% discount. Today's discount is 33.4%. This market is 7.8% undervalued. Median home price is $280,400 with a rental parity value of $421,600. This market's discount is $141,200. Monthly payment affordability has been improving over the last 1 month(s). Momentum suggests unchanging affordability. Resale prices on a $/SF basis increased from $183/SF to $184/SF. Resale prices have been rising for 8 month(s). Over the last 12 months, resale prices rose 7.3% indicating a longer term upward price trend. Median rental rates increased $1 last month from $1,860 to $1,862. 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]

As predicted three years ago, now that house prices are near the peak, for-sale inventory is returning to the market. Back in late 2012, I noted that Below-median home inventories may not recover for years. Here was my reasoning: For home inventories to recover, sellers must come back to the market. Since so many loanowners are underwater, particularly at lower price points, very few organic sales occur on below-median properties. Further, since below-median loanowners have a strong incentive to squat until foreclosure, few of these properties are coming to market as short sales. That leaves us with a depleted market that is only be replenished by foreclosures. Banks are in no hurry to process foreclosures and bring these properties to…[READ MORE]

he fear of homelessness is the essential motivation to get people to work to produce goods and services in our society. Modern American culture can trace its roots on the North American continent to pioneering English settlers. Life on the frontier is harsh, and each family unit is self-reliant. In a frontier society, if people didn’t work, and if they didn’t produce their own food and shelter, then they died. Fear of death from starvation or exposure was very real, and anyone who wasn’t motivated to produce something of value to themselves or others faced the near certainty of painful death. In a frontier society, there are no bailouts. We have made much progress over the last four centuries, and…[READ MORE]

Paying too much for a house can leave the family with too little disposable income to satisfy other desires or meet important family obligations. Housing is often touted as an investment you can live in. The dual purpose nature provides twice the utility, so people feel comfortable paying twice the price. Buying a home is always an emotional decision. When people fall in love with a property, if either spouse bothers do perform a financial analysis, it's generally biased toward the answer they want to hear. Rather than an objective look at the costs and benefits, the analysis becomes a flimsy justification for an emotional decision already made. Sometimes, that leads to costly mistakes. Live & Learn: Buying a home…[READ MORE]

Lenders must deny mortgages to good borrowers to prevent too many deadbeats from getting mortgages and destabilizing the housing market. Environment is stronger than will power. -- Paramahansa Yogananda When you were in high school, did your parents ever caution you about the company you keep? The people you share common interests with can be either a positive or a negative influence on your decision making. They can lead to to success, or they can lead you astray. When lenders want to evaluate a potential borrower, they don’t interview friends, but they do examine the financial characteristics of a borrower’s life, and they make determinations based on the historical behavior of others with the same characteristics. That’s the whole point…[READ MORE]

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