Author Archive: Irvine Renter

  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 always feeling like an outsider. In my Junior year of high school, I hatched a plan to go back to Wisconsin to have the high school experience I felt I was denied in Arkansas. I went home to come of age. It was 1985, my thoughts were short my hair was longCaught somewhere between a boy and manShe was seventeen and she was far from in-betweenIt was…[READ MORE]

  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 another, and several aunts, uncles and cousins lived nearby. I had the support of this community during my formative years. I grew up believing everything is possible: You can be anybody you want to be,You can love whomever you willYou can travel any country where your heart leadsAnd know I will love you stillYou can live by yourself, you can gather friends around,You can choose one special oneAnd the only measure of…[READ MORE]

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 arrived with two bothers in New York, but sadly, he became separated from them and never saw them again. Thomas immigrated to Adams County, Wisconsin where he started a family which still boasts many local residents. Although my name is Welsh, the women who married Roberts men for the next several generations were of Scandinavian descent. I am a mutt of the American melting pot. Many…[READ MORE]

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 demonstrated to me that I still had much work to do. I've read this post dozens of times, but now it's time for life to imitate art. The Great Housing Bubble cultivated a gentility of entitlement, a sordid societal residue, a system of reliance, a conviction among people that they may possess anything they wish just because; deserving without earning; Grace. Divine acceptance is given;…[READ MORE]

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 up.” This economic fallacy fosters the belief in future price increases and the limited risk of buying real estate. In general real estate prices do increase because salaries across the country do tend to increase with the general level of inflation, and it is through wages that people make payments for real estate assets. When the economy is strong and unemployment is low, prices for residential real estate tend to rise.…[READ MORE]

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 mortgage rates decrease the size of the loan and reduce the amount borrowers can bid on real estate. While it is possible the federal reserve may print enough money to spark wage inflation, given the high levels of residual unemployment and a low labor participation rate, wage inflation is a long way off, almost certain to come later than rising mortgage rates. Therefore, if rising mortgage rates results in…[READ MORE]

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 money but they got too close to the sun and got burnt. When they fell back to earth, their impact created a debt crater that the rest of us are being asked to fill in. Borrowers took on enormous risks during The Great Housing Bubble. If this were not the case, US lenders would not have completed 6,324,545 foreclosures over the last ten years. Legislators accurately identified the risks assumed by borrowers that caused them to lose their homes,…[READ MORE]

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 a new era of high home ownership rates, rapidly rising prices, and economic prosperity through "liberating" home equity. Everyone got rich: the agents, the brokers, the bankers, the buyers, the sellers, and everyone nearby who enjoyed a prosperous economy driven by the profligate behavior of their neighbors. It was the best of times. Unfortunately, the "innovations" of the last housing bubble proved to be costly failures. These affordability products contained Ponzi finance alternatives such as negative amortization that allowed…[READ MORE]

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 their transgressions. However, within the real estate law firm people may engage in a wide range of behaviors that many others find morally repugnant. The moral compass of each individual determines whether or not they behave in ways others find objectionable. Calibrating this internal moral compass is the world of ethics. Religion is a widespread source of ethical precepts, and many people look to their religious teachings when determining their behavior in the…[READ MORE]

When construction or renovation costs exceed the resale value, a house literally is worth less than zero. In Coastal California, the sticks-and-bricks construction cost is only a small portion of a house's resale price. The rest is residual land value. In Coastal California it's common to see small houses in beach towns demolished and replaced with a large mansion. In the rest of the country, residual land values are usually too low to justify such activity. With far fewer restrictions on land use in most of the US, land values are much lower. The construction cost of a new house is generally about 80% of the final resale value of a home, leaving 20% for the cost of a finished…[READ MORE]

Monthly Housing Report

In Memoriam: Tony Bliss 1966-2012