Friday, July 29, 2016

Do school ratings reflect the quality of education that warrants high real estate values?

School ratings reflect where concerned parents move with their children, not the quality of education a school provides.

Parents want to provide their children with every advantage in life. Those students with the best education generally enjoy higher wages and greater life achievement than...

Thursday, July 28, 2016

More houses and higher density will bring down housing costs over the long term

More housing supply will reduce the competition among workers for available properties. More housing supply is certain to bring down housing costs in the long-term.

California Governor Jerry Brown recently proposed to reduce the regulatory burden on real estate developers to facilitate...

Wednesday, July 27, 2016

Mortgage interest rates may hit new record low

The housing market can’t absorb a sudden or large increase in mortgage rates without major declines in sales and perhaps even decreases in prices.

Congress passed the Dodd-Frank financial reform in response to the housing bubble and bust. These new Dodd-Frank mortgage regulations will prevent f...

Tuesday, July 26, 2016

Industry insider fosters false hope for boomerang buyer surge

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.

Many people criticize the financial media for running negative stories that “talk down the market,” but...

Monday, July 25, 2016

Rising prices allows home sellers to cash out and extinguish debts

Many people sell when prices rise high enough for them to retire, move up, or extinguish their debts.

Many people imagine the property ladder as a progression from a condo near work, to a house in the suburbs, to a mansion by the beach. Many people buy entry-level housing, and when prices rise...

Friday, July 22, 2016

The journey home

I was going to write a real estate post to get back into the swing of things, but I decided instead to write about my vacation experience. It was more inspiring for me. I hope you enjoy it.

My grandfather just celebrated his 99th birthday. Based on what I observed, he seems like he still has...

Thursday, July 21, 2016

Responsible homeowners did not lose their homes in foreclosure

Whether or not “responsible” homeowners lost their homes depends on how you define “responsible.”

A common theme in the financial media is that people lost their homes during the housing bust due to unemployment, probably because it’s easier than acknowledging the...

Wednesday, July 20, 2016

Real estate negotiation: motivations of the parties

A house is worth no more than a buyer is willing to pay and no less than a seller is will to accept.

Motivation of the Other Party
Professional poker players spend hours studying people’s reactions to try to elucidate the cards their opponents are holding. In poker if players can determine what ...

Monday, July 18, 2016

Top six worst manifestations of mortgage equity withdrawal

Mortgage equity withdrawal is a bad idea that often leads to disaster.

I have often wondered if I had made different decisions during the bubble if I would have been caught up in the frenzy. Although I don’t believe I could have fully ingested kool aid, I probably would have behaved like most o...

Saturday, July 16, 2016

Los Angeles Housing Market Report: July 2016

Historically, properties in this market sell at a 9.5% discount. Today’s discount is 16.0%. This market is 6.5% undervalued.
Median home price is $534,900 with a rental parity value of $639,600. This market’s discount is $104,700.
Monthly payment affordability has been improving over...

Friday, July 15, 2016

Vacation 2016: Castle in the Sky


Over the last few days, I wrote about my family history in Ancestral Call, my youth in Community of Elders, my teenage years in Coming of Age, and today I conclude with a little perspective on life and an expression of one of my deepest desires. You never know what will happen when you...

Thursday, July 14, 2016

Vacation 2016: Coming of Age


Having grown up in a community of elders with a long heritage, I have a deep connection to my old home town of Adams-Friendship, Wisconsin. I lived there throughout a blissful childhood until my family moved away when I was eleven years old. I struggled to adapt to my new environment...

Wednesday, July 13, 2016

Vacation 2016: A Community of Elders


Childhood in a community of elders
Yesterday, in Ancestral Call, I detailed my family history. I was born into a close-knit rural community, swaddled by family, extended family and a broader community which shared the same values. Both my grandparents living within a few miles of one...

Tuesday, July 12, 2016

Vacation 2016: Ancestral Call

I will be on vacation the remainder of this week. If you want to know where I’m going and why, read on.

My rural roots
My roots run deep in the rural farm community of Friendship, Wisconsin. My fraternal family line can be traced back to Thomas Roberts, a Welshman born in 1831. Thomas...

Monday, July 11, 2016

What happens to people who live beyond their means?

I am out of town this week. Please carry on in the astute observations without me.
I chose to bring this piece out again because I am going through a reset of my own entitlements. Several months ago, I trashed or sold most of my stuff. I wanted to purge my attachments, but recent events...

Friday, July 8, 2016

What would happen if everyone believed real estate prices only go up?

Ten years ago people truly believed real estate prices only go up. As a result people behaved imprudently and borrowed too much money because they believe they could always sell the property for enough to pay the loan.

The mantra of the National Association of Realtors is “real estate only goes ...

Thursday, July 7, 2016

Fewer home sales or lower prices sure to follow higher mortgage interest rates

In the absence of rising wages, when mortgage interest rates go up, one of two things will happen: either sales will fall, or prices will fall. Since we don’t have a free market in housing, sales will fall and remain depressed for a very long time.

Assuming a consistent payment, higher...

Wednesday, July 6, 2016

Should homeowners be allowed to risk their house?

Over 6 million foreclosures were caused by mortgages with risky terms few borrowers understood. It’s government’s role to protect people from themselves, particularly when taxpayers fund the bailouts.

Flying high is dangerous; just ask Icarus. Everybody was flying high on free...

Tuesday, July 5, 2016

Why did Dodd-Frank effectively ban mortgage affordability products?

Mortgage affordability products produce short term results, but they are unstable, and widespread proliferation leads to millions of foreclosures.

Affordability products in the 00s were the financing panacea everyone in real estate hoped for. Widespread use of affordability products ushered in...

Friday, July 1, 2016

realtors" top 10 ethical problems

Real estate agents are among the least ethical business practitioners. They desperately need a culture of conformance to a code of ethics.

The law defines what a society deems as minimally appropriate conduct. People who violate the law (and get caught) pay penalties or endure incarceration for...