The Collected Works of Author and Blogger Larry Roberts

Many people when they first discover bubble blogs think housing bears are tinfoil-hat-wearing crackpots with extremely pessimistic outlooks on life. There are perma-bears (Roubini, Shiller, Fleckstein) as well as perma-bulls (Watts, NAR, Kudlow). The truth is generally somewhere in between. I learned long ago that extremists are never happy people because they seldom get their way. As the Buddha noted, it is the "middle path" that leads to happiness. I have spent my voting life as a independent/Libertarian voting for whoever I believed to be the best candidate, most generally a moderate. However, there are times when what is perceived as an extreme is actually the correct view. As Barry Goldwater noted, "...extremism in the defense of liberty is no…[READ MORE]

I wanted to share it here. So who is responsible? Borrowers, lenders, investors, the FED: IMO, they are all responsible; it is only a matter of degree. Irresponsible borrowers are like children, if you offer them something they want, no matter the terms, they will take it. The federal government realized this basic fact years ago when they passed predatory lending laws. Does that make the borrower any less responsible? No, but by definition, sub-prime borrowers are irresponsible. If they took responsibility for their debts, they wouldn't be sub-prime. So if you offer a bunch of money to the most irresponsible among us, what would you expect? I would expect them to spend it irresponsibly and not worry about paying…[READ MORE]

The big discussion on Wall Street today is whether or not the problems with sub-prime will impact alt-A and prime loans and if all of this will impact housing markets and the economy as a whole. I want to examine why and how sub-prime's implosion will impact the housing market. It is estimated that tightening lending standards are going to eliminate 21% of the buyers from the market. We all know intuitively this sounds bad. But what is the impact? For a deeper understanding read The Plankton Theory Meets Minsky. This will result in lower prices. If prices are lower and standards are tightening, serial refinance will come to an end. Many, if not most of the borrowers needing to…[READ MORE]

This is the final installment in my series of related posts pertaining to the Irvine residential real estate market. It is my intention in this post to bring it all together, make a prediction as to the timing and depth of the upcoming crash, and describe the variables that will influence the market decline. Below is a chart I created to demonstrate what I believe will occur in the Irvine Housing market between 2007 and 2013. Median sales price will decline approximately 40% from near $700,000 to near $400,000 over the next 5 years. There will be a multi-year flattening of prices at the bottom. Sustained appreciation will not return until 2013 or later. Peak bubble prices will not be…[READ MORE]

We have speculated a great deal on this board about the future of home prices in our area. The arguments all boil down to a simple conjecture: will prices fall to back to their fundamental values, or are prices going to remain permanently detached and inflated? I make no attempt to answer that question here. The chart link below is a graphical representation of what it would look like if home prices fall back to their fundamental valuations in Orange County.   Below is a link to the excel file I used. It is a bit messy, but experienced users can probably navigate it. Orange County Median Price Projections Worksheet BTW, I was thinking about the current state of the…[READ MORE]

Page 382 of 383« First...102030...377378379380381382383