OCHN: Why aren"t homebuilders producing more homes?

Homebuilders won’t build what they can’t sell, and household formation isn’t so robust that builders must provide more to keep pace with demand.

Since 2012 the financial media chronicled the reflation of the old housing bubble but portrayed it falsely as a robust recovery...
Why aren"t homebuilders producing more homes?

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OCHN: San Bernardino County Housing Market Report: April 2016

IRVINE, Calif., January 2, 2016 – OC Housing News
San Bernardino County Housing Market Report: January 2016
Historically, properties in this market sell at a 25.7% discount. Today’s discount is 32.2%. This market is 6.6% undervalued.
Median home price is $280,200 with a rental parity value ...
San Bernardino County Housing Market Report: April 2016

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OCHN: How "sophisticated" financial managers operate personal Ponzi schemes

In its simplest form, a personal Ponzi scheme is borrowing money to pay debt service: acquiring new debt to pay old debt. It’s a path to disaster.

What is a personal Ponzi scheme? Aren’t Ponzi schemes the advanced financial management crime of sophisticated money managers like...
How "sophisticated" financial managers operate personal Ponzi schemes

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OCHN: Two strategies for more abundant and less expensive housing

By reducing local regulatory hurdles to new development, and by providing subsidies to low-income Americans, the free market will provide more housing that will drive down costs for everyone.


Housing costs too much in the United States because we don’t provide enough housing to meet...
Two strategies for more abundant and less expensive housing

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OCHN: Could you live in a less than 300 square feet?

The tiny house movement is the extreme of housing and possession austerity. Would anyone with the means to live with more chose to live that way?

When builders and developers create new projects, they generally produce a variety of floorplans to meet a market niche where they can reasonably...
Could you live in a less than 300 square feet?

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OCHN: Home mortgage interest deduction no longer benefits anyone

Only high wage earners save on taxes due to the home mortgage interest deduction, and the benefit is lost due to higher house prices paid be everyone utilizing this tax subsidy.

Does the home mortgage interest deduction serve any useful purpose? Usually, when the government subsidizes...
Home mortgage interest deduction no longer benefits anyone

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OCHN: What four factors really determine prices in the housing market?

There are four fundamentals that determine resale value: borrower income, allowable debt-to-income ratios, interest rates, and down payment requirements.


When economists write about the fundamentals of housing, they usually mention job and wage growth, both of which impact sales (of special...
What four factors really determine prices in the housing market?

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OCHN: Real estate investors are NOT crowding out family homebuyers

The National Association of realtors perpetuates the myth that investors are scooping up family homes and leaving potential buyers out in the cold.

Many investors use the OC Housing News to search for properties because it provides a detailed investment analysis of every home available for sale...
Real estate investors are NOT crowding out family homebuyers

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OCHN: A decade ago, housing bulls were completely and catastrophically wrong

Back in 2006 the housing bulls weren’t just a little wrong. They were completely and totally and unequivocally incorrect in every way.

I recently had a conversation with a CEO of a large housing market forecasting company. In our conversation, I told him about my experience as a housing...
A decade ago, housing bulls were completely and catastrophically wrong

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OCHN: Today"s homebuyers unwilling to climb the property ladder like previous generations

People shopping for houses today are unwilling to purchase substandard housing in hopes of trading up at some later date.

Houses are expensive. Many renters would like to buy a house, but they lack the down payment necessary, and many renters are early in their careers when their income...
Today"s homebuyers unwilling to climb the property ladder like previous generations

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OCHN: Big banks are too big to innovate

If an institution is too big to fail, then it must not be allowed to take innovative risks because the potential consequences for the economy are dire.

Innovation entails risk. Any profitable business venture that is widely known to be successful is rife with competitors, so profit margins...
Big banks are too big to innovate

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OCHN: Which generation was hurt the most by the housing bust?

Generation X was hurt more than the Baby Boomers or the Millennials by the housing bust because many Generation Xers lost their starter homes, and many others are still trapped in them.

The Baby Boomers lost their retirement savings.
The Millennials can’t afford to enter the housing...
Which generation was hurt the most by the housing bust?

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OCHN: Californian"s share zealous faith in rapid home price appreciation

California has a major cultural “religion” that cuts across traditional denominational lines: the religion of real estate and faith in rapid home price appreciation.

Religious conviction provides meaning, hope, and joy to billions of people. Faith is belief by choice, generally in the absence of...
Californian"s share zealous faith in rapid home price appreciation

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OCHN: Dodd-Frank works well, so financial elites hate it

Dodd-Frank created the Consumer Financial Protection Bureau that prevents the finance industry from ripping off its customers. More importantly, Dodd-Frank saves homeowners and taxpayers from another painful housing bust.

In the past, whenever home affordability became a problem, lenders would...
Dodd-Frank works well, so financial elites hate it

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OCHN: What happens to high-end real estate if money laundering stops?

The Panama Papers uncovered the money laundering schemes funneling millions into high-end real state. What happens to this market if the flow of illegal funds suddenly stops?

New York city is flooded with Russian cash.
Irvine, California, is flooded with Chinese cash.
Miami, Florida, is flooded...
What happens to high-end real estate if money laundering stops?

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OCHN: Are Chinese savers coerced into supporting a real estate Ponzi scheme?

By eliminating other alternatives for investing saving and encouraging real estate speculation, the Chinese government compels its citizens to sustain a Ponzi scheme, allocating resources where they are not needed.

People fuel financial manias with greed and foolish optimism. Generally, prices...
Are Chinese savers coerced into supporting a real estate Ponzi scheme?

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OCHN: The epic fail of boomerang homebuyers

2015 was touted as the year of the boomerang buyer. Lenders and realtors prepared, and the financial media wrote the invitations, but the boomerang buyers failed to arrive.


The financial media periodically runs stories about the return of boomerang buyers, those who lost their homes in...
The epic fail of boomerang homebuyers

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OCHN: Five most common lies realtors tell

realtors frequently lie to their clients to close deals and generate commissions, placing their needs and desires above their clients.


Every word she writes is a lie, including “and” and “the.” Mary McCarthy

When a realtor talks, do you believe a word of it? At some...
Five most common lies realtors tell

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