The Collected Works of Author and Blogger Larry Roberts

Author Archive: Larry Roberts

Newport Beach Housing Market Report: April 2017 What’s happening down at the beach? Historically, properties in this market sell at a 33.2% premium. Today’s premium is 26.2%. This market is 7.0% undervalued. Median home price is $1,668,500, and resale $/SF is $790/SF. Prices rose 4.0% year-over-year. Monthly cost of ownership is $7,660, and rents average $6,245, making owning $1,402 per month more costly than renting. Rents rose 6.0% year-over-year. The current capitalization rate (rent/price) is 3.6%. Market rating = 9   Download (PDF, 3.77MB)[READ MORE]

Regulating mortgage debt-to-income ratios helps prevent Ponzi schemes Debt-to-income ratios must be limited because beyond a certain point, rising debt service becomes a Ponzi scheme. In The Great Housing Bubble, I wrote about how we could prevent the next housing bubble: Loans for the purchase or refinance of residential real estate secured by a mortgage and recorded in the public record are limited by the following parameters based on the borrower’s documented income and general indebtedness and the appraised value of the property at the time of sale or refinance: All payments must be calculated based on a 30-year fixed-rate conventionally-amortizing mortgage regardless of the loan program used. Negative amortization is not permitted. The total debt-to-income ratio for the mortgage…[READ MORE]

San Francisco Metro Housing Market Report: March 2017 Double digit rental rate increases are driving rapid home price appreciation in San Francisco. Historically, properties in this market sell at a 24.1% premium. Today’s premium is 11.4%. This market is 12.7% undervalued. Median home price is $828,000, and resale $/SF is $532/SF. Prices rose 7.0% year-over-year. Monthly cost of ownership is $3,815, and rents average $3,406, making owning $408 per month more costly than renting. Rents rose 8.2% year-over-year. The current capitalization rate (rent/price) is 3.9%. Market rating = 8  [READ MORE]

Are house prices really too high? Houses feel expensive because an unusually large percentage of the payment is going toward principal amortization. For the last few years, my monthly housing market reports rated most communities across Southern California highly, suggesting it’s a very good time to buy a house. Yet despite this dispassionate review of the math, most people who actually shop for a house feel like prices are way too high. Why is that? Well, house prices are high. The federal reserve in conjunction with government officials reflated the housing bubble to restore collateral backing to lender’s bad loans. The housing bubble that peaked in 2005/2006 witnessed house prices 20 years ahead of their time. Reflating the housing bubble…[READ MORE]

Irvine Housing Market Report: March 2017 Historically, properties in this market sell at a 22.3% premium. Today’s premium is 11.3%. This market is 11.0% undervalued. Median home price is $778,900, and resale $/SF is $434/SF. Prices rose 5.0% year-over-year. Monthly cost of ownership is $3,589, and rents average $3,214, making owning $374 per month more costly than renting. Rents rose 4.3% year-over-year. The current capitalization rate (rent/price) is 4.0%. Market rating = 9[READ MORE]

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