Long Beach and Orange County Real Estate News

April 28, 2022

Why This Housing Market Is Not a Bubble Ready To Pop

Why This Housing Market Is Not a Bubble Ready To Pop

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

Homeownership has become a major element in achieving the American Dream. A recent report from the National Association of Realtors (NAR) finds that over 86% of buyers agree homeownership is still the American Dream.

Prior to the 1950s, less than half of the country owned their own home. However, after World War II, many returning veterans used the benefits afforded by the GI Bill to purchase a home. Since then, the percentage of homeowners throughout the country has increased to the current rate of 65.5%. That strong desire for homeownership has kept home values appreciating ever since. The graph below tracks home price appreciation since the end of World War II:

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

The graph shows the only time home values dropped significantly was during the housing boom and bust of 2006-2008. If you look at how prices spiked prior to 2006, it looks a bit like the current spike in prices over the past two years. That may lead some people to be concerned we’re about to see a similar fall in home values as we did when the bubble burst. To help alleviate those worries, let’s look at what happened last time and what’s happening today.

What Caused the Housing Crash 15 Years Ago?

Back in 2006, foreclosures flooded the market. That drove down home values dramatically. The two main reasons for the flood of foreclosures were:

  1. Many purchasers were not truly qualified for the mortgage they obtained, which led to more homes turning into foreclosures.
  2. A number of homeowners cashed in the equity on their homes. When prices dropped, they found themselves in an underwater situation (where the home was worth less than the mortgage on the house). Many of these homeowners walked away from their homes, leading to more foreclosures. This lowered neighboring home values even more.

This cycle continued for years.

Why Today’s Real Estate Market Is Different

Here are two reasons today’s market is nothing like the one we experienced 15 years ago.

1. Today, Demand for Homeownership Is Real (Not Artificially Generated)

Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home. Today, purchasers and those refinancing a home face much higher standards from mortgage companies.

Data from the Urban Institute shows the amount of risk banks were willing to take on then as compared to now.

Why This Housing Market Is Not a Bubble Ready To Pop | MyKCM

There’s always risk when a bank loans money. However, leading up to the housing crash 15 years ago, lending institutions took on much greater risks in both the person and the mortgage product offered. That led to mass defaults, foreclosures, and falling prices.

Today, the demand for homeownership is real. It’s generated by a re-evaluation of the importance of home due to a worldwide pandemic. Additionally, lending standards are much stricter in the current lending environment. Purchasers can afford the mortgage they’re taking on, so there’s little concern about possible defaults.

And if you’re worried about the number of people still in forbearance, you should know there’s no risk of that causing an upheaval in the housing market today. There won’t be a flood of foreclosures.

2. People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s

As mentioned above, when prices were rapidly escalating in the early 2000s, many thought it would never end. They started to borrow against the equity in their homes to finance new cars, boats, and vacations. When prices started to fall, many of these homeowners were underwater, leading some to abandon their homes. This increased the number of foreclosures.

Homeowners didn’t forget the lessons of the crash as prices skyrocketed over the last few years. Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has more than doubled compared to 2006 ($4.6 trillion to $9.9 trillion).

The latest Homeowner Equity Insights report from CoreLogic reveals that the average homeowner gained $55,300 in home equity over the past year alone. Odeta Kushi, Deputy Chief Economist at First Americanreports:

“Homeowners in Q4 2021 had an average of $307,000 in equity - a historic high.”

ATTOM Data Services also reveals that 41.9% of all mortgaged homes have at least 50% equity. These homeowners will not face an underwater situation even if prices dip slightly. Today, homeowners are much more cautious.

Bottom Line

The major reason for the housing crash 15 years ago was a tsunami of foreclosures. With much stricter mortgage standards and a historic level of homeowner equity, the fear of massive foreclosures impacting today’s market is not realistic.

Posted in Market Update
March 22, 2022

The Average Homeowner Gained More Than $55K in Equity over the Past Year

The Average Homeowner Gained More Than $55K in Equity over the Past Year
The Average Homeowner Gained More Than $55K in Equity over the Past Year
If you’re a current homeowner, you should know your net worth just got a big boost. It comes in the form of rising home equity. Equity is the current value of your home minus what you owe on the loan. Today, you’re building that equity far faster than you may expect – and this gain is great news for you.
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Pat Cassara
Keller Williams Realty
Long Beach, CA
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Posted in Market Update
June 4, 2021

What’s Motivating People To Move Right Now?

This year, Americans are moving for a variety of reasons. The health crisis has truly reshaped our lifestyles and our needs. Spending so much more time in our current homes has driven many people to reconsider what homeownership means and what they find most valuable in their living spaces.

According to the 2020 Annual National Movers Study:

With a new perspective on homeownership, here are some of the reasons people are reconsidering where they live and making moves right now.

1. Working from Home

Remote work became the new norm, and for some, it’s persisting longer than initially expected. Many in the workforce today are discovering they don’t need to live so close to the office anymore and they can get more for their money if they move a little further outside the city limits. Apartment List notes:

If you’ve tried to convert your guest room or your dining room into a home office with minimal success, it may be time to find a larger home. The reality is, your current house may not be optimally designed for this kind of space, making remote work very challenging.

2. Room for Fitness & Activities

Staying healthy and active is a top priority for many Americans, and dreams of having space for a home gym are growing stronger. A recent survey of 4,538 active adults from 122 countries noted the three fastest-growing fitness trends amongst active adults:

  • At-home fitness equipment (up 50%)
  • Personal trainers/nutritionists (up 48%)
  • Online fitness courses, classes, and subscriptions (up 17%)

Having room to maintain a healthy lifestyle at home – physically and mentally – may prompt you to consider a new place to live that includes space for at-home workouts, hobbies, and activities for your household.

3. Outdoor Space

Better Homes & Gardens recently released the outdoor living trends for this year, and three of them are:

  • Outdoor Kitchens: 60% of homeowners are looking to add outdoor kitchens.
  • Edible Garden: Millions of people began gardening during the pandemic . . . to supplement pantries with homegrown fruits, vegetables, and herbs.
  • Secluded Spaces: As outdoor activity increases, so does the need for privacy.

You may not, however, currently have the space you need for these designated areas – inside or out.

Bottom Line

If you’re clamoring for more room to accommodate your changing needs, making a move may be your best bet, especially while you can take advantage of today’s low mortgage rates. It’s a great time to get more home for your money, just when you need it most.

Posted in News
Aug. 19, 2020

Q: How Can Buyers and Sellers Benefit Simultaneously?

Here are some facts buyers and sellers will equally love to hear. 


Our market has ‘opportunity’ written all over it. Mortgage interest rates have dropped down to 3%, a historically low mark. These low rates give today’s buyer the ability to afford more home than they could in the past. According to the National Mortgage News, buyers’ purchasing power has increased by $32,000, meaning the average buyer can afford $32,000 more than they could just last year. Of course, this gives the buyer more choices when it comes to finding and financing their next home.


The biggest perk for sellers is the low inventory. There are just not enough homes available for sale to meet the high buyer demand. According to the National Association of Realtors, housing inventory is down 20% from a year ago today. Housing inventory has been a problem for a while now, but these favorable interest rates have amplified demand, making it increasingly difficult for buyers to find what they’re looking for on the market. Sellers face little competition and can benefit from buyers who are trying to outbid one another for their homes.


All the multiple-offer scenarios push home prices even higher. Sellers in today’s market could potentially profit more than they’ve been able to in the past. They’re also way more likely to sell their home quickly.


So whether you’re thinking about buying or selling a home soon, great opportunities await. Call me if you have any questions about market conditions or real estate in general. I’m always here to help, and I would love a chance to chat with you!

Posted in Home Buying
July 24, 2020

Q: Why Is It More Affordable to Buy Now?

It’s more affordable to buy a home now, and I’m explaining why. 


It’s more affordable to buy a home today than it’s been in a very long time. When I first got into the real estate business in 1982 I worked for a small mortgage company, and we did FHA, VA, and conventional mortgages. Interest rates at that time were between 16% and 17%, and home prices were quite a bit lower. Today we have higher home prices, but it’s a great time again to sell, refinance, and borrow money because we have historically low interest rates. 


For example, to borrow $300,000 today at 3.03% (and rates are actually lower now) your mortgage payment would be $1,270 per month. Compare that with the 1970s, when you’d have to pay about 8.86% and it jumps to $2,284 per month! Renting a 3-bedroom, 1-bathroom house in this area would cost you between $3,000 to $3,500 per month (maybe more). You can see that buying a property makes more sense than renting. 


Other benefits of owning a home include mortgage deduction, future appreciation, and security. If you’re a homeowner, check into it and see if now’s a good time for you to refinance. If you’re considering buying and want to know what it would take to buy in today’s market, I can connect you with a lender I work with, he can get you pre-qualified, help you find what your price range is, and then I can help you find a house that suits your needs. 


Please call or email me if you have any questions about buying a property or real estate in general. I would love to help you.


Posted in Home Buying
July 8, 2020

Q: What’s Driving Our Long Beach Housing Market?

We’re in a seller’s market here in Long Beach. 


As we make our way through the summer of 2020, our low interest rates and a lack of available homes are driving our Long Beach market. 


In the Long Beach area, the average home price is approximately $675,000, which is a 5.6% increase compared to last year. We’re in a seller’s market, which means there aren’t enough homes to meet the buyer demand. It’s not uncommon for homes coming on the market to receive multiple offers. This competition allows sellers to accept offers over list price, often within the first week or two. 


Even with the high demand and lack of inventory causing prices to rise, I’m still asked quite often whether the coronavirus will cause prices to eventually drop like they did during the 2008 housing crash. As you can see in the graph at 1:23 in the video above, most major economists predict price appreciation over the next two years. Furthermore, they expect the strength of the housing market to lead us out of the economic slowdown. 


The bottom line: if you’re a seller looking to get top dollar for your home, now’s a great time to list. If you’re a buyer, now’s also a great time to buy due to our low interest rates. 


If you have more questions about our Long Beach market or there’s anything else I can help you with, don’t hesitate to reach out to me. I look forward to speaking with you. 

Posted in Market Update
April 29, 2020

Buying a Home Right Now: Easy? No. Smart? Yes.

Buying a Home Right Now: Easy? No. Smart? Yes.

Buying a Home Right Now: Easy? No. Smart? Yes. | MyKCM

Through all the volatility in the economy right now, some have put their search for a home on hold, yet others have not. According to ShowingTime, the real estate industry's leading showing management technology provider, buyers have started to reappear over the last several weeks. In the latest report, they revealed:

“The March ShowingTime Showing Index® recorded the first nationwide drop in showing traffic in eight months as communities responded to COVID-19. Early April data show signs of an upswing, however.”

Why would people be setting appointments to look at prospective homes when the process of purchasing a home has become more difficult with shelter-in-place orders throughout the country?

Here are three reasons for this uptick in activity:

1. Some people need to move. Whether because of a death in the family, a new birth, divorce, financial hardship, or a job transfer, some families need to make a move as quickly as possible.

2. Real estate agents across the country have become very innovative, utilizing technology that allows purchasers to virtually:

  • View homes
  • Meet with mortgage professionals
  • Consult with their agent throughout the process

All of this can happen within the required safety protocols, so real estate professionals are continuing to help families make important moves.

3. Buyers understand that mortgage rates are a key component when determining their monthly mortgage payments. Mortgage interest rates are very close to all-time lows and afford today’s purchaser the opportunity to save tens of thousands of dollars over the lifetime of the loan.

Looking closely at the third reason, we can see that there’s a big difference between purchasing a house last December and purchasing one now (see chart below):Buying a Home Right Now: Easy? No. Smart? Yes. | MyKCM

Bottom Line

Many families have decided not to postpone their plans to purchase a home, even in these difficult times. If you need to make a move, let’s connect today so you have a trusted advisor to safely and professionally guide you through the process.


Posted in News
April 1, 2020

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year | MyKCM

The last few weeks and months have caused a major health crisis throughout the world, leading to a pause in the U.S. economy as businesses and consumers work to slow the spread of the coronavirus. The rapid spread of the virus has been compared to prior pandemics and outbreaks not seen in many years. It also has consumers remembering the economic slowdown of 2008 that was caused by a housing crash. This economic slowdown, however, is very different from 2008.

One thing the experts are saying is that while we’ll see a swift decline in economic activity in the second quarter, we’ll begin a sharp rebound in the second half of this year. According to John Burns Consulting:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far.”  

Given this situation, if you’re thinking about buying a home this year, the best thing you can do right now is use this time to get pre-approved for a mortgage, which you can do from the comfort of your home. Pre-approval will help you better understand how much you can afford so that you can confidently do the following two things when you’re ready to buy:

1. Gain a Competitive Advantage

Today’s low inventory, like we’ve seen recently and will continue to see, means homebuyers need every advantage they can get to make a strong offer and close the deal. Being pre-approved shows the sellers you’re serious about buying a home, which is always a plus in your corner.

2. Accelerate the Homebuying Process

Pre-approval can also speed-up the homebuying process so you can move faster when you’re ready to make an offer. Being ready to put your best foot forward when the time comes may be the leg-up you need to cross the finish line first and land the home of your dreams.

Bottom Line

Pre-approval is the best thing you can do right now to be in a stronger position to buy a home when you’re ready. Let’s connect today to get the process started.

Posted in News
March 27, 2020

Don't Let The Coronavirus Deter You From Homeownership

What You Can Do to Keep Your Dream of Homeownership Moving Forward 

What You Can Do to Keep Your Dream of Homeownership Moving Forward [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Don’t put your homeownership plans on hold just because you’re stuck inside.
  • There are several things you can do right now to keep your home search moving forward.
  • Connect with an agent, learn about resource programs for things like down payments, and get pre-approved today.
Posted in News
Sept. 28, 2016

Japanese Tranquility Rests Quietly On Long Beach Property

Those who live in Long Beach may not realize a Japanese wonderland is hidden close by. On the campus of California State University, Long Beach sits the Earl Burns Miller Japanese Garden. This space of tranquility and peaceful beauty creates the perfect area to unwind and embrace the glory of nature.

Mrs. Loraine Miller Collins gifted the land in honor of her late husband. The widow described her hopes for visitors to the Japanese Garden, “When a person is tired, or anxious, or in a quest of beauty may they enter and come forth refreshed to meet the problems of the day.” Carefully designed, the garden showcases multiple species of trees. A vast collection of Liquidambar, Sweetshade, Birch and various Pines all lend to the delightful sights. Bamboo stands proud and tall as Magnolia blooms reflect prettily in the pond. Picturesque wooden bridge provide paths to stroll and ponder.

Live In Long Beach And Take Part In An Ancient Japanese Tea Ceremony

Special events often rich in culture occur at this serene Long Beach property. And as Autumn leaves drop it becomes time for the Fall Sekku Traditional Tea Ceremony on October 16, 2016. Those in attendance for this formal ceremony will have the opportunity to whisk powdered tea and indulge in some treats. The online calendar lists other upcoming occasions that enhance a trip to the Earl Burns Miller Japanese Garden.

Garden gates are open to the public Tuesdays through Fridays at 8 a.m. to 3:30 p.m., and on Saturdays from 12 to 4 p.m. It is closed Sundays and Mondays.


Posted in News