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Author Archive: Irvine Renter

As house prices rise and more homeowners possess equity again, some are withdrawing this money at low rates and spending it, stimulating the economy. During the housing mania, people bought homes because house prices rose rapidly, and lenders gave equity to homeowners at 100%+ of the value set by recent comps. Under such circumstances, houses were very desirable, and it added fuel to the housing mania, and funded millions of personal Ponzi schemes. Homeowners like mortgage equity withdrawal because it provides them instant access to the free money bestowed upon them by the magic appreciation fairy. Homeowners gladly suspend their disbelieve at the too-good-to-be-true nature of free money, and if lenders willingly dole it out, homeowners eagerly accept it. Politicians…[READ MORE]

Do you want free money?  If you buy a home from a homebuilder without an agent, you pay full price. If you buy a home with us as your agent, you get 1.5% back. Same house, but 1.5% of the purchase price refunded back to you. It’s free money! Take it!  As a bonus, you get full agent representation. Did you know many items in a builder’s sale contract are negotiable? Do you know which options are better installed by the builder and which ones are better done by others later? In addition to helping negotiate a better price, we also prepare detailed reports showing the cost of ownership of your new home. Why put yourself at the mercy of…[READ MORE]

Higher mortgage interest rates will reduce future demand. Today's homeowners will not experience the home price appreciation enjoyed by the previous generation. Many would-be homeowners rush to the market to lock in low mortgage rates out of fear of being priced out forever. They fear that if they wait, houses that are affordable today won't be affordable tomorrow. Perhaps there is some basis for this fear, but if they paused for a moment to consider the ramifications of that occurrence, they might not be in such a hurry to buy after all. If today's homebuyer were to be priced out tomorrow, they probably wouldn't be alone in that predicament. In fact, if a great many people are priced out by…[READ MORE]

Coastal community real estate is more expensive relative to rent than it's ever been. A bubble perhaps? Very expensive real estate dominates Coastal California communities. The narrow strip of land within a mile or two of the ocean is one of the most desirable climates in the world, and many people of great wealth want to live there. The wealthy have done very well over the last 30 years, and the concentration of wealth at the top is so high that the richest 1% of Americans own 42% of all the wealth in the country. As the rich get richer and as other opportunities for investment wane, many are competing for the limited number of prime beach properties, sending prices…[READ MORE]

Rising interest rates and a falling affordability ceiling will limit home price appreciation for a decade or more. There is no free lunch -- at least according to economists. However, if you work for the federal reserve, you truly believe you can have a free lunch. They lowered interest rates to reflate the old housing bubble, and they convinced people nobody has to pay for it. They created wealth out of thin air -- that and printing about four trillion dollars. Unfortunately, there is a price to be paid. It will either be paid by holders of wealth through currency debasement and inflation, or it will be paid by future homeowners through lower levels of home price appreciation. Think about…[READ MORE]

For long-term home occupancy, owning is generally more financially favorable; however, there are strong reasons not to buy and rent instead. Considering the many benefits of home ownership, why would anyone chose to rent? It’s said that the decision to own is emotional whereas the decision to rent is financial. During the housing bubble, renting was a wise financial move because it cost twice as much to own than to rent, but now that prices are much closer to rental parity, there are fewer compelling financial reasons to rent rather than own. Between 35% and 40% of Americans chose not to buy and rent their primary residence instead. The reasons vary, but they all generally relate to commitment and finance.…[READ MORE]

Contrary to popular belief, capturing home price appreciation is not the best financial reason to own real estate. Many people want to own their homes because they believe the property will rapidly go up in value, providing them an endless stream of free money they can spend on anything they want. During the housing mania, lenders allowed anyone to finance up to 100% (or more) of the value of their property, and with "innovations" in mortgage finance, their payments would actually go down! Quite a deal. Unfortunately, those innovations proved to be less than successful, and most people who availed themselves of that free money lost their homes in foreclosure, or they barely hang on through a loan modification, probably…[READ MORE]

The Dan Hrey Group, the Everyday Luxury Group, and the OC Housing News are teaming up to provide a free real estate seminar on February 4, 2016 at JT Schmids Restaurant in Tustin, CA. IRVINE, Calif., January 31, 2016 – On February 4, 2016, The Dan Hrey Group, the Everyday Luxury Group, and the OC Housing News will present a real estate seminar focused on how to sell real estate for top dollar. The event will be held at JT Schmids at the District in Tustin, CA starting at 5:30 PM. Appetizers and drinks will be served. Speakers will start at 6:00. The event is hosted by author and famed blog writer Larry Roberts and one of the nation's top…[READ MORE]

A majority of Americans hold a healthy disdain for consumer debt, but most carry debt anyway. When you see an American Express Card commercial, do you see a sophisticated financial manager or an irresponsible spendthrift? The credit card companies want you to see a savvy money manager who wisely uses their products. But is it wise to use a costly product you don't really need? In a world without consumer credit, people would save money, and they would only spend what they had available. People would store their unspent earnings in banks who could loan that money to businesses that produce goods and services that benefit the economy. These savers would also earn money on their savings as lenders competed…[READ MORE]

After enduring 10 years of excessive mortgage debt service, many people downsize when prices rise high enough for them to sell. Most people visualize the housing ladder as a steady upward progression from starter home to Mansion by the beach, but that's seldom the reality. Many people buy entry-level housing, and when prices rise high enough for them to sell and have 20% down for a larger property, the participate in the move-up market. If their income grew while they lived in their entry-level home, the step up can be quite luxurious. If their income didn't go up much, they are probably better off refinancing into a lower-cost mortgage and staying put. The housing bubble severely disrupted the housing market.…[READ MORE]




In Memoriam: Tony Bliss 1966-2012