The Collected Works of Author and Blogger Larry Roberts

The current market rally shows signs of maturity. Is it due to die of old age, or will this rally last forever? Most people who speculate in financial markets lose money, and most of them fail to recognize their "safe investments" are actually risky speculative bets. The housing bubble was a speculative mania, and despite the wild rise in prices during the final two years, most buyers late to the rally lost money -- often a great deal of money on what they believed was a can't-miss deal of a lifetime. The basic problem is emotional. Once people take a position in a financial market, their emotions immediately impact their behavior. They begin combing financial media sites for confirmation of the…[READ MORE]

Both homeowners and renters face high housing costs, but only homeowners enjoy government bailouts, loan modifications, and protections to "keep their homes." Why don’t renters get bailed out like homeowners? It seems fairly obvious that homeowners think renters are degenerates and losers, and even the government robs working renters to subsidize unemployed homedebtors. But does that mean it’s acceptable to favor one group over another? What happens when renters lose their jobs? Does anyone step forward to pay their rent or allow them to squat like homeowners? Why not? Renters are no better or worse in the eyes of politicians; both renters and homeowners vote. And even if renters were a degenerate sub-species of humans, reporters and homeowners would be…[READ MORE]

For audiences ranging from academic researchers to ordinary homebuyers, housing market data suiting everyone is available free on the Internet. The future of data is free. Twenty years ago, real estate agents provided value simply because they had access to the secret list of houses for sale. Anyone who wanted to buy a house needed to use a real estate agent just to find out what was for sale. Data alone had value. Not anymore. The Internet excels at dissemination data. From the beginning, individuals and organizations that wanted to attract people to their site learned that giving away data and information was a good technique. The competition for traffic drives website owners to provide better content, including more data.…[READ MORE]

As home prices move higher, existing homeowners cheer, but new homebuyers assume excessive debts to climb the property ladder. Most people accept the idea that ever-rising house prices are good, and that a decline in house prices is bad. However, this idea appears to only apply to housing. People don't cheer when food or gas prices go up, but they do when house prices rise. Of course, food and gas are immediate consumption items, whereas a house is both an item of consumption and an asset. This fact often prompts people to pay absurd prices to satiate their desires, believing that it's a "good investment." Most of the time, buying a house is a good investment, but late in the…[READ MORE]

The mainstream media litters the internet with articles about how rising mortgage interest rates won't hurt the housing recovery. To better understand why rising interest rates are such a big issue to housing, it's worth reviewing the impact falling interest rates have had on house prices for the last 25 years. House prices and rental parity The basis of all house prices valuations is rental parity, the price point where the cost of ownership equals the cost of a comparable rental. Rental parity is a tether on house prices because if resale values become detached from their fundamental values, once the kool aid intoxication wears off, prospective buyers benefit more from renting that owning, and prices invariably fall to this…[READ MORE]

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