As more families eschew homeownership in favor of renting, the cost of renting residential real estate continues to rise.
In the depths of the Great Recession, incomes dropped and many people lost their jobs and many others barely hung on. Ordinarily, such circumstances would cause rents to… – Flipside of declining homeownership rates: relentlessly climbing rents
Stable house prices with low volatility isn’t very exciting, but it’s the best thing possible for residential real estate.
The norm in California housing over the last 40 years has been extreme volatility. We had one stretch in the mid 1990s when prices were closely tethered to… – Housing prices are expensive, affordable, stable, and boring
Is the crisis in housing due to toxic mortgage products or people refusing to pay their mortgage obligations?
Have you noticed that eight years after housing collapsed and three years after housing bottomed, people still refer to housing as being in a crisis? As long as millions of delinquent… – Moratorium on mortgage defaults would solve housing crisis
The “months of supply” indicator has little or no predictive power and often gives a false impression of the strength or weakness of the real estate market.
The “months of supply” is a measure of market absorption, providing a reading of how fast homes are selling… – “Months of Supply” is worst indicator of housing market activity
Subsidized credit is the process of taking credit from worthy borrowers and providing it to unworthy borrowers.
I always find it interesting when writings from many years ago resonate through the ages as if they were written yesterday, like the writings of Frédéric Bastiat, a 19th century F… – Taxpayer backing for the GSEs ensures the misallocation of credit
Negative cashflow investments are generally a losers game. The only path to success is for rapid appreciation that often fails to materialize.
Real estate investors during the housing bubble put their money to work on faith. There is no logical reason to believe house prices only go up. In… – Big losers in real estate buy negative cashflow investments
Some forms of debt are better than others.
I make no secret of my disdain for the behavior of bankers during the housing bubble. I’m not so extreme that I consider all borrowing and lending to be evil; however, I draw a clear distinction between what I consider good debt, useful for economic e… – Signatory debt is bad; asset-backed debt is good