The Collected Works of Author and Blogger Larry Roberts

Author Archive: Larry Roberts

If mortgage rates keep rising, home sales will be lower in 2017 than in 2016, prompting talk of another housing recession. Remember all those stories assuring us that higher mortgage rates wouldn't cause any problems with housing? Well, today's featured article is the story where they debunk years of wishful thinking and expose the masses to basic math. It was a long time coming, but I'm glad the financial media is finally breaking the bad news. This isn't rocket science. It doesn't take a supercomputer or a math savant to calculate how much rising mortgage rates will hurt the market. And it doesn't take a genius or a housing market guru to decipher how this will impact housing. For every…[READ MORE]

Illegal immigration advocates attempt scaring policymakers with the specter of a housing crisis caused by mass deportations. Advocates for dubious political policies often resort to scare tactics in hopes that policymakers will favor their policy prescriptions. For example, the advocates of fiscal austerity trumpeted the fear of rampant inflation while most economists stated increased stimulus would achieve a more positive effect. The austerity advocates resorted to emotional appeals and dubious reasoning that later proved wrong. Advocates of strict marijuana laws alarmed politicians with the dangers of legalization, but as more states decriminalized and finally legalized marijuana, very few negative side effects emerged. The latest advocates to resort to dubious arguments are those opposed to deporting illegal immigrants. It's difficult to argue in…[READ MORE]

Coastal housing markets face headwinds while inland markets benefit from Trump's economic policies. Coastal housing markets had a great run over the last 40 years. Land use restrictions created a shortage, falling mortgage rates inflated prices, wage growth created demand, and trade and tax policies favored upward distribution of income and wealth. The combination of all these factors caused residential real estate values to appreciate much more quickly on America's coasts than it did in the heartland. This may be about to change. Land Use Regulatory Relief Donald Trump stated during the campaign that he wanted to roll back land use regulations that restricted growth. I doubt he progresses much on this front, but he could initiate lawsuits that could negate…[READ MORE]

The Fair Housing Act may be used to strike down land development restrictions that cause a disparate impact on minorities, which California's process clearly does. Fact: California house prices are high relative to income due to a shortage of available homes. Fact: California Nimbys lobby local officials to prevent housing from being built to alleviate the shortage. Fact: Calfornia Nimbys will not change because they personally benefit from reduced traffic congestion and higher home prices. What can we deduce from these facts? First, education will make no difference. Some activists try to convince Nimbys to embrace more homes in their neighborhoods. It's a futile effort. I pointed out that Nimbys are hypocrites. I demonstrated that Nimbys don't love their own children. Most people…[READ MORE]

If California wanted to lower house prices, it could tax foreign investment and tax homes left vacant year-round. The primary reason house prices are so high in California is a lack of supply. However, a secondary reason is the influx of foreign investors, many of whom don't live in the properties or rent them out. These foreign purchases drive up prices for locals, and if they don't rent the property, the property disappears from the local housing stock entirely, making our shortage even worse. Buying and maintaining an empty box may be a sound investment decision for foreign investors; however, it's a negative for the economy because local residents must pay more for housing, which reduces the disposable income they…[READ MORE]

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