The Collected Works of Author and Blogger Larry Roberts

Archive for February, 2016

The US housing market starts 2016 with a strong economy, low unemployment, improving wage growth, and very low mortgage rates: A recipe for strong sales and price increases. The US Housing market is poised for a strong start in 2016. The underlying economy was strong enough for the federal reserve to start raising interest rates in December. Unemployment is low and wage growth is picking up, so more qualified borrowers are likely to become buyers in the days ahead. Further, with mortgage interest rates trending down toward record lows, the demand for housing as expressed in dollars borrowers can put toward a purchase is near record highs. The conditions as described above will likely lead to robust sales and strong…[READ MORE]

IRVINE, Calif., February 1, 2016 – OC Housing News San Bernardino County Housing Market Report: February 2016 Historically, properties in this market sell at a 25.7% discount. Today's discount is 31.4%. This market is 5.7% undervalued. Median home price is $279,600 with a rental parity value of $407,600. This market's discount is $128,000. Monthly payment affordability has been worsening over the last 2 month(s). Momentum suggests worsening affordability. Resale prices on a $/SF basis declined from $184/SF to $184/SF. Resale prices have been falling for 3 month(s). Over the last 12 months, resale prices rose 7.2% indicating a longer term upward price trend. Median rental rates declined $9 last month from $1,812 to $1,803. The current capitalization rate (rent/price) is…[READ MORE]

Today's homeowners are paying down mortgage faster than ever before as rapid loan amortization builds wealth across America. Which is better for accumulating equity, lower prices or lower interest rates? Both lower the monthly cost of ownership and result in more disposable income. Obviously, the banks prefer higher prices to recoup their capital from their bad bubble-era loans, so they are offering 4% interest rates to prevent prices from going any lower. I think most buyers would prefer lower prices, but since the banks make the rules which determine market prices, low interest rates and high prices are what we get. From a homebuyers perspective low rates or low prices depends on how they acquire the property. All-cash buyers would…[READ MORE]

Some foreclosure and eviction cases can be heartbreaking. However, we live by rule of law in this country, and unless we want to start giving away real estate to those with the saddest story, these evictions must take place. Property evictions cause severe emotional pain for the dispossessed. People develop strong emotional attachments to the place they call home, and losing that attachment suddenly is so painful that many well-meaning people believe evictions should be banned. People who support prohibiting evictions do not understand that evictions are essential to the operation of our housing system. Eviction is both a threat and a consequence. People are only evicted from their homes if they fail to make the required payments. Renters are…[READ MORE]

Paying off debt early is a far superior long-term financial plan than continually adding to mortgage debt to support an extravagant lifestyle. Most people believe they achieve the American Dream when they buy a house, but most often they only buy 3.5% to 20% of a house, not the whole thing. Although it feels like it's their house, it's not. If they quit paying the mortgage, the bank can take it from them, as millions found out during the housing bust. Real home ownership is only achieved when the debt is retired, and the shortest route to success is to pay off a mortgage early. Pay off mortgage debt early? Am I crazy? Why would anyone do that in an…[READ MORE]

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