Contact Shevy Akason at (949) 769-1599

Shevy (at) EveryDayLux.com

Author Archive: Irvine Renter

By forcing owners of shell corporations to reveal their identities, US officials will slow the flow of illicit money into high-end real estate. People who make money outside the legal financial system have a problem. If they want to put their money back into legal circulation without exposing their nefarious activities, they need to "launder" the money through some kind of financial transaction, and ideally they want to hold the asset secretly so the authorities can't find it if they get caught. Owning real estate through a shell corporation is a favored activity of money launderers. Since most agree that cracking down on drug cartels, organized crime, and other illegal activities is a good thing, preventing drug kingpins from anonymously…[READ MORE]

Good climate, good services, and a chronic shortage of housing combine to create an intractable problem with homelessness in California. What is the minimum level of housing quality people are entitled to? If you pose that question to Coastal California residents, many will cite their needs for a large single-family detached house with granite counter tops -- and they believe they are entitled to it. For me, I'm just thankful I am not homeless. If I were facing homelessness, I wouldn't want to freeze, and I wouldn't want to starve, so I would seek out a location with good climate and ample social services. The want for a good climate rules out the Northern US, the rain and humidity rules…[READ MORE]

The federal reserve raised the federal funds rate, but that doesn't mean mortgage interest rates must rise. The future of housing in inexorably tied to the course of mortgage interest rates. If mortgage rates remain below 4.25%, both house prices and sales volumes will be higher in 2016 than 2015. An improving economy, strong job growth and rising wages are a recipe for a healthy housing market. Unless rising rates spoils the party, 2016 will be a good year. Does that mean there's no reason to worry? Hardly. The federal reserve is raising interest rates, and although this doesn't necessitate higher mortgage rates, it certainly encourages them. Higher mortgage rates will harm sales, and if rates rise high enough to…[READ MORE]

In a recent speech, Bernie Sanders unapologetically bashed the too-big-too-fail banks. He's a rare breed: an honest politician. I recently wrote that Donald Trump will be the next President of the United States due to his populist appeal. However, for people like me who really want to see the too-big-to-fail banks crushed to rubble, Bernie Sanders is a more appealing alternative to Donald Trump. When Donald Trump blusters, everyone knows it's just red meat supplied to augment the bread and circuses campaign to win the Republican nomination. Nobody really knows what Donald Trump believes or what he would do if elected President. On the other hand, Bernie Sanders means what he says, and he says he wants to break up…[READ MORE]

A rising US dollar makes Irvine homes much more expensive for Chinese buyers, and capital controls makes it much more difficult to move money out of China for those inclined to do so. Chinese investors buy a significant number of homes in Irvine. Anecdotally, 80% of sales in some new home communities are sold to Chinese Nationals. In fact, Irvine homebuilders depend on Chinese buyers to purchase their overpriced houses, which becomes a problem if this flow of money dries up. Both homebuilders and real estate agents delude themselves with notions about the desirability of Coastal California to convince themselves the influx of Chinese money is based on sustainable fundamental factors. In reality, this is hot money escaping an unstable…[READ MORE]

Millennials are not climbing on the property ladder, upsetting everyone who depends on real estate transactions to make a living. A common refrain among housing industry advocates is that Millennials are simply ignorant to the benefits of home ownership, and if they could only be "educated" properly, they would shun renting in favor of owner-occupied housing. Apparently, Millennials are ignorant to both the benefits of home ownership and the lending options available to them. This is nonsense and wishful thinking. To the chagrin of housing industry advocates, Millennials are well aware of the perils of home ownership, and the education propaganda spouted by the housing industry falls on deaf ears. Millennials learned from the housing bust -- they learned house…[READ MORE]

What do you get when you combine a strengthening economy with a chronic shortages of housing? Sky-high rents. California began restricting growth in the 1970s with regulations like CEQA. Local opposition groups sprang up ostensibly to protect their quality of life. What started as a reaction to poorly designed and executed suburban sprawl devolved into an attempt by Nimbys to cast their neighborhoods in amber to prevent any future changes or development, even reasonable development. As a result of various growth restrictions, we simply don't have enough housing stock to meet the needs of our growing population, either rental or owner-occupied. When any commodity is in short supply, prices tend to rise, and rentals are no exception. There are not…[READ MORE]

After nine consecutive years of extremely weak sales, low sales rates are starting to look like the new normal. A lie, if repeated often enough, becomes accepted as truth. The mainstream media is reporting that home sales are strong and demand is robust. Compared to the depths of the housing bubble crash, sales are up somewhat, mostly due to investor demand, but sales are still very low by historic standards, and we’re nowhere near a healthy real estate market. If not for the dearth of inventory, the anemic demand wouldn’t be pushing prices up at all. Just how anemic have sales been? The percentage of houses sold each year, the turnover ratio, plummeted during the bust, and over the last…[READ MORE]

A proposed real estate tax will be passed through to businesses across California, failing to tax the people it's aimed at. "Take from the rich and give to the poor." The legend of Robin Hood resonates with those who believe the unequal distribution of wealth is a social problem best solved by forcibly taking from those who have and giving to those who have not. It appeals to our notions of social justice, particularly when we perceive the rich obtained their wealth through nefarious or equally forceful means. During Medieval times when wealth was afforded only to those who took it from working peasants by force, the selfless Robin Hood was a hero who balanced the equation. In our modern…[READ MORE]

Higher interest rates create superior investment alternatives that will drain money out of high-end real estate investments. The rich always get richer, and they use their wealth to buy real estate at ever-increasing prices -- At least that's what most people believe (particularly homebuilders). But is that really true? Over the last decade the federal reserve lowered interest rates to zero to support inflated asset prices, especially home values. The rich did get richer, and they did buy real estate, which supported unjustifiably high house prices, leading to increasing wealth disparity and populist unrest. As interest rates rise, these trends could easily reverse. The value of any asset is the future cashflow risk-adjusted by a discount rate. When the federal…[READ MORE]

Search

Monthly Housing Report

tghb_ochn

tghb_ochn

In Memoriam: Tony Bliss 1966-2012
cll_games

Archives