Redux

Lenders Are More Culpable than Borrowers (redux)

Jan 142013

Apportioning blame for the housing bubble has become a polarized political issue. The Left wants to portray the evil banks as taking advantage of hapless borrowers thus entitling these borrowers mortgage relief or absolution for strategic default. The Right points out the responsibility borrowers have for their own behavior and wants to bail out the banks for completely self-serving reasons. As with most political issues, the polarized and generally self-serving positions of each side fail to capture the truth of the matter. Nobody wants to admit or take responsibility. Politicians are masters of deflecting responsibility, and now borrowers are deflecting [Read More...]

Accelerated default, what strategic default really is (redux)

IRVINE, NEWS, Redux

Dec 282012

People form strong attachments to their homes. Walking away is never a decision they take lightly. We can discuss the pros and cons and come up with our own beliefs and attitudes about it, but the turnover of our housing stock caused by the housing crash will be very painful for those who go through it. Ruthless default or accelerated default? I write often about hidden premises buried within the arguments writers make. These distinctions are important, and unless we uncover our fallacious beliefs, we make erroneous judgments and carry false beliefs. I have written many times about strategic default, and [Read More...]

The folly of negative-cashflow investment (redux)

HUNTINGTON BEACH, NEWS, Redux

Dec 272012

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 fact, there have been two prior periods in California’s recent history where house prices did, in fact, go down. However, with kool aid intoxication, otherwise known as faith-based investing, reality is ignored. If you truly believe house prices only go up, no price is too high, and you don’t have to worry about a backup plan if house prices don’t go up. There is only one viable backup plan when a speculative play [Read More...]

The inner workings of house prices and housing markets (redux)

LAKE FOREST, NEWS, Redux

Dec 262012

The inner workings of house prices and housing markets (redux)

Californian’s believe house prices go up by magic. Real estate appreciation is religion in California as people blindly accept the Truth of never-ending price increases. Few question current prices or wonder why current prices go up as most fool themselves with wishful thinking, cockeyed optimism, and kool aid intoxication. Most people do not understand real estate prices — they think they do — every Californian is an expert on real estate, after all, we have about half a million realtors, but few people really understand markets. Motivated by greed, blinded by ignorance and enabled by lenders, borrowers inflated The Great [Read More...]

The California Social Contract (redux)

FOUNTAIN VALLEY, NEWS, Redux

Dec 252012

Satire is often more revealing than detailed explanations. The pathology of a collection of beliefs becomes apparent when the natural end result of a group of people acting on those beliefs is an absurd contradiction and an obviously unsustainable state. The following is a satirical essay written from the point of view of a desperate homeowner trying to sustain the Ponzi Scheme of the Great Housing Bubble: The California Social Contract You fence-sitters are failing to fulfill your part of the California Social Contract. Your failure to continue buying homes is disrupting the social order, and it is causing those of [Read More...]

Real estate negotiation techniques (redux)

NEWS, Redux, SAN JUAN CAPISTRANO

Dec 242012

Real estate negotiation techniques (redux)

Negotiating the sale of residential real estate is no more difficult that negotiating for any other product of service that does not have a fixed price; however, due to the colossal cost of houses, the process is more important financially than negotiating for other big-ticket items like automobiles. A mistake made while buying or selling a house could cost as much as a new car; sometimes such mistakes could pay for many cars. Skilled negotiators can obtain favorable pricing and terms without the assistance of a broker, but the novice who is inexperienced at this process often will not. Novice [Read More...]

The unceremonious fall from entitlement (redux)

Redux

Nov 172012

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; whereas, worldly possessions are earned — a basic truth lost through possessory entitlement. Few construct and contribute to the greater good, and many expect easy money from lenders, Governments, housing and stock markets or free-money Ponzi Schemes. We are impaired by our lender’s failure and our Government’s response to the crisis our lenders created; a wound that lingers as a festering sore [Read More...]

Urgency Versus Reality: realtors Win, Buyers Lose (redux)

Redux

Oct 272012

realtors don’t stop finding reasons to buy until buyers have enough. It doesn’t matter if the reasons are good or bad, they just needs to be plausible and salable. Today, I want to explore why realtors are responsible for the rubbish they promote. I want to start by saying that there are many good Realtors (deserving of a capital “R”), and they are as dismayed about the practices in their profession as I am. I have the utmost respect for the character of Randy Rector, broker of record for Evergreen Realty, and many other Realtors and brokers have approached me [Read More...]

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