Author Archive: Irvine Renter

Why Trustee Sales? Most buy at Trustee Sales to make or save money. When compared to resale properties, Trustee Sales are generally discounted between 10% and 20% and sometimes the discounts are even greater. The first post in this series featured a property being flipped for a 25% gain, a significant profit for taking risks and trapping cash for a few months. However, flipping for profit is not the only reason to consider this market. My disdain for flippers is apparent, but my ire is not spread evenly. Flippers who buy at auction provide necessary liquidity in a market isolated from lender financing, and flippers who renovate properties (even with pergraniteel) add tangible value; however, the flippers who annoy me…[READ MORE]

Judicial or Non-Judicial Foreclosure Foreclosure proceedings in most states are either Judicial or Non-Judicial at lender’s discretion. Unlike mortgages, Trust Deeds give the lender the Power of Sale at public auction if the borrower fails to repay the debt. With a Trust Deed, a lender can exercise this right without a court order using the faster and less-expensive non-judicial foreclosure. The lender may sue the borrower for repayment of property debt in a judicial foreclosure and obtain a Deficiency Judgment which they can record as a blanket lien against all borrower property in a given jurisdiction. Lenders often will pursue judicial foreclosure and Delinquency Judgment if the amount is large and the borrower has other liquid assets the lender can…[READ MORE]

The next three days get a little wonkish. Prepare for a primer on foreclosures. Ownership is primal. The first two words children learn in any language are “no” and “mine.” People have an deep intuition of what is theirs and what is not. Emotionally, It’s Mine defines ownership; in the real world, it is not so black and white. When people own real estate, what they really “own” is a bundle of property rights. What rights are the bundle, and how are these rights held? Today, I want to take a step back and review real estate law and outline property rights and vesting title. As I recently took the excellent Broker’s review course from Real Estate Trainers, much of…[READ MORE]

Many people truly don't understand by helping "struggling borrowers" was a bad idea. It was. It encourages even more risk taking. Many issues compete for our attention in the wake of the housing bust. However, the importance of these issues is not equal. Underlying most of them is the central problem of the housing bust: moral hazard. Every decision we make in life has consequences. If we save regularly and invest wisely, the consequences are wealth and peace of mind. If we spend foolishly and speculate wildly, the consequences are periods of feast and famine, delusions of grandeur, enormous entitlements, and when times are tough, unbearable stress. Positive results come from good decisions and visa versa. That’s how people distinguish…[READ MORE]

Of all the posts I've written over the last nine years, this is one of those I am most proud of. 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…[READ MORE]

Historically, properties in this market sell at a 9.5% discount. Today's discount is 14.4%. This market is 4.9% undervalued. Median home price is $505,600 with a rental parity value of $590,700. This market's discount is $85,100. Monthly payment affordability has been improving over the last 2 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $423/SF to $429/SF. Resale prices have been rising for 4 month(s). Over the last 12 months, resale prices rose 10.7% indicating a longer term upward price trend. Median rental rates increased $8 last month from $2,633 to $2,641. The current capitalization rate (rent/price) is 5.0%. Rents have been rising for 12 month(s). Price momentum signals rising rents over the next three…[READ MORE]

The federal reserve finally raised the federal funds rate 1/4 point on Wednesday, December 16, 2015. However, their oft-forgotten policy of buying mortgage-backed securities is actually far more meaningful to mortgage rates. The monthly housing market reports I publish each month became bullish in late 2011 due to the relative undervaluation of properties at the time. I was still cautious due to weak demand, excessive shadow inventory, the uncertainty of the duration of the interest rate stimulus, and an overall skepticism of the lending cartel’s ability to manage their liquidations. In 2012, the lending cartel managed to completely shut off the flow of foreclosures on the market, and with ever-declining interest rates, a small uptick in demand coupled with a…[READ MORE]

We need strong regulations in mortgage lending to prevent a repeat of the housing bubble and subsequent crash.   The financial elite in the United States hate the Consumer Financial Protection Bureau (CFPB) because the CFPB stands in opposition to those who want to rape and pillage the American people. After the financial elites destroyed the economy and nearly brought down our entire financial system with reckless risk taking and foolish lending, legislators were forced to act for the greater good. Generally, I do not like government paternalism. When Ronald Reagan came to power and began our 25 year experiment with government deregulation, I thought it was a good idea. I am repelled when I see paternalistic politicians who believed…[READ MORE]

If mortgage rates remain low, home sales will strengthen and house prices will keep going up. There is much angst among potential homebuyers about rapidly rising prices and the potential for another housing bubble. The cheerleaders in the mainstream media are keen to squelch these concerns, and they argue that affordability is so good that rising rates won’t have much impact. This is where parsing the various markets is important. The pundits that claim we are in no danger of inflating a new housing bubble are right — in the weakest markets. Interest rates could double, and prices would still be relatively affordable in Las Vegas. That market is so undervalued that an uptick in mortgage rates won’t stop the…[READ MORE]

House prices and sales in 2016 depend almost entirely on what happens with mortgage interest rates "Those who have knowledge, don't predict. Those who predict, don't have knowledge." Lao Tzu Each year I like to make a real market forecast. I try to examine current conditions, consider how these conditions change, and form an opinion of how these conditions effect housing. It's the opposite of the trend extrapolation nonsense passed off as forecasting by most housing market analysts. I try to focus on areas where my forecast falls outside the consensus view. Regurgitating consensus cud doesn't make the analysts bolus any more palatable. The consensus opinion this year, like every year, is for sales and home prices to rise 3%…[READ MORE]

Monthly Housing Report

In Memoriam: Tony Bliss 1966-2012