The Collected Works of Author and Blogger Larry Roberts

Archive for March, 2016

IRVINE, Calif., March 1, 2016 – OC Housing News   Riverside County Housing Market Report: March 2016 Historically, properties in this market sell at a 18.5% discount. Today's discount is 24.7%. This market is 6.1% undervalued. Median home price is $306,200 with a rental parity value of $414,000. This market's discount is $107,800. Monthly payment affordability has been improving over the last 1 month(s). Momentum suggests unchanging affordability. Resale prices on a $/SF basis increased from $175/SF to $175/SF. Resale prices have been rising for 4 month(s). Over the last 12 months, resale prices rose 6.7% indicating a longer term upward price trend. Median rental rates increased $4 last month from $1,798 to $1,802. The current capitalization rate (rent/price) is…[READ MORE]

Proponents of austerity predicted a number of dire consequences for fiscal stimulus, but so far, none of them have come to pass. Have you ever been completely certain about something only later to find out you were completely wrong? Most people won't admit it, and many people fail to acknowledge the truth even to themselves. I like to believe I have been more right than wrong over the last nine years of writing about these issues, but I have made some significant blunders. So far pretty much every prediction I've made about interest rates has been wrong. I was nearly right last year when I said interest rates would not rise in 2015, but in the late December meeting Janet…[READ MORE]

The worst social problem in the most heavily Progressive-dominated political districts is a lack of housing caused by selfishness and greed, two characteristics hypocritical Progressives like to criticize Conservatives for. California has a housing problem. Anyone who lives in California copes with higher housing costs than nearly everywhere else in the United States. This problem is a boon to landowners and high wage earners, but it’s a bust for lower middle class wage earners who often put 50% of their income toward housing. Why do we have this problem? First and foremost, the problem is one of supply. California has a chronic shortage of housing. The lack of supply is the primary reason prices are so high. When supply is…[READ MORE]

When the mortgage industry innovations fail, millions of people lose their homes, and taxpayers fork over billions in bailout aid to foolish lenders and foolish borrowers. Financial innovation: Designing a loan program that borrowers won't repay but lenders and investors will fund. Most industries advance and evolve through innovations, sometimes very disruptive ones. However, some industries -- like mortgage lending -- are prized for their stability. Mortgage lending doesn't innovate, and as a society, we don't want it to because whenever mortgage lenders start innovating, trouble is brewing. Most innovations in lending either cause major losses at banks, or in their worst forms these innovations destabilize our financial system. Consider the "innovation" of the option ARM. This loan allowed people…[READ MORE]

Mortgage rates will remain low because the banks and the economy can't accommodate the loss of sales and lower house prices bound to accompany higher rates. "Stock prices have reached what looks like a permanently high plateau." - Irving Fisher, Ph.D. in economics, Oct. 17, 1929 "We will not have any more crashes in our time." - John Maynard Keynes in 1927 When something goes on for a long time, particularly something the defies previously accepted truths, eventually people come to believe it will go on forever. Everyone thought the economic prosperity of the 1920s would go on forever. Few foresaw the stock market crash of 1929 and the Great Depression of the 1930s. Investors and economists are particularly prone…[READ MORE]

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