The Collected Works of Author and Blogger Larry Roberts

Archive for 2016

Self-driving cars will impact home design and community design of the future, but it won't be the big disruption to real estate values some imagine. Transportation systems provide access to property and facilitate commerce. Automobile road systems in particular take up tremendous amounts of real estate, and roads define the patterns in real estate development. Further, the need for cars adds 400 square feet or more to our houses that's largely useless as living space. But what happens if our relationship with the car changes? How does this impact housing or land development? Over the last few years as engineers make progress toward self-driving cars, many armchair futurists imagined what a world of driverless cars would look like. Most visions…[READ MORE]

High house prices are demanded by foolish Ponzis, enjoyed by real homeowners, and favored by politicians pandering to both groups. Why are high house prices the keep rising considered a universal good? Does everyone benefit if house prices are high and keep moving higher? When house prices move up faster than wages, who benefits, and who pays the price? Most people accept the idea that ever-rising house prices are good, and that a decline in house prices is bad. This idea seems to only apply to housing because ordinarily people cheer when the price of an essential product goes down, and complain when it goes up. Why is housing so different? Gasoline prices over the last few years yo-yoed between…[READ MORE]

Most real estate investors are really speculators betting on appreciation. It's a strategy destined to be a loser. One look at the MLS, and everyone sees that house prices are very high. People don't get as much house for their money because house prices rose faster than incomes. When house prices start moving up even when fundamentals don't support the move, speculators take notice. When speculators become active, they add to demand, pushing prices higher, potentially fueling a market mania. For many years, the astute observations on this site were very bearish -- and with good reason. Once the market bottomed, most of the bears went into hibernation, and the comments remained more objective and balanced for a few years.…[READ MORE]

Entry-level housing is not available for sale because many owners of these properties are still underwater and unable to list and sell their homes. From 2000 to 2005, house prices more than doubled in many areas of the country. Although rates of home price appreciation that high can't be sustained, most people don't know or believe that. In fact, most people who bought late in the rally extrapolated the short-term rally to infinity. They really believed they were going to make a fortune, and all their dreams were coming true. It didn’t work out that way. Only the strongest markets across the country are back above the housing bubble peak. Late buyers and refinancers who used amortizing loans and consistently…[READ MORE]

Los Angeles County Housing Market Report: August 2016 [caption id="attachment_48333" align="alignright" width="270"] 4.2.7[/caption] Historically, properties in this market sell at a 9.5% discount. Today's discount is 16.7%. This market is 7.2% undervalued. Median home price is $542,100 with a rental parity value of $657,300. This market's discount is $115,200. Monthly payment affordability has been improving over the last 6 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $423/SF to $426/SF. Resale prices have been rising for 11 month(s). Over the last 12 months, resale prices rose 7.1% indicating a longer term upward price trend. Median rental rates increased $22 last month from $2,741 to $2,763. The current capitalization rate (rent/price) is 4.9%. Rents have been…[READ MORE]

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