It looks like the bottom-callers of 2012 were right. Continued interference in the mortgage market by the federal reserve lowered mortgage interest rates to record low levels. Plus, changes in policy at the major banks held back the tide of foreclosures and greatly restricted the MLS inventory. Demand was up slightly, mostly due to investors as owner-occupants remained absent from the market. First-time homebuyer participation fell to very low levels. The small uptick in demand, fueled by record low interest rates, and the dramatic decline in for-sale inventories caused prices to bottom in 2012. It isn’t how the bottom callers [Read More...]

Everyone can’t own a house. We tried that during the housing bubble, and it didn’t work out very well. First, by pushing everyone into home ownership, it raised prices to unsustainable levels. Second, doing so by giving unqualified buyers dodgy loan products created instability in the market resulting in a credit crunch and a market crash. Increasing home ownership is a laudable goal, but there is always a segment of the population that isn’t cut out for home ownership. Some people need the freedom and flexibility of renting to pursue career opportunities. Some people simply don’t have the financial discipline [Read More...]

The people we elect to public office should set a higher standard for conduct than ordinary citizens. If we are to trust them to make laws governing the rest of us, we should be able to rely on them to follow the rules rather than gaming the system to their advantage. Unfortunately, that’s not the world we live in. Many California lawmakers got caught up in the mania of the housing bubble, and when their faith in ever-increasing house prices was shaken, their ethics went on sabbatical. Real estate bubble bursts for California lawmakers too In the boom years, several [Read More...]