Long Beach Real Estate-Downtown Long Beach Condos

We are honored to announce a wonderful new addition to our staff here at Long Beach Real Estate Home.  Jeff Brown of BawldGuy Talking and Brown & Brown Investment Properties will be presenting information on Real Estate Investing. 

Brown & Brown  has 36 years of experience into helping people do a better job of acquiring rental property, selecting the right financing, and growing their investments.  Their investors range from first-time buyers to million-dollar property owners. They’re college graduates to high school dropouts. They’re business owners, teachers, electricians, office workers… They all have the will to be objective, adhere to a solid Plan, and do everything on Purpose.  They retire with enough income to live their dream. Or, in Jeff's words, they live the life they Purposefully Planned.

Meet Jeff Brown: 

From 5-10 years old, I lived in Manhattan Beach. First just above Live Oak Park, then on the strand in a duplex. By the time I was eight years old, my best friend and I had been taught to body surf by the local surfers, who had tired of watching over us. Those were the days. A year later, after making friends with an older neighbor, I was allowed to take my new bright red Schwinn on the strand all the way to the Redondo Beach Pier and back.

The month I turned 10 we found ourselves living in Norwalk, a culture shock if there ever was one. Where am I going with this? It’s my roundabout way of saying I’ve got a history with Long Beach real estate.

1965 found me as a freshman in the Norwalk High School marching band. I played trombone. Turned out we were pretty good too. The final parade of the year was the Long Beach All Western, which, my memory tells me, sported bands from the 11 western states. It was a pretty big deal back then. We were judged 4^th Runner-up, meaning I guess, we were the fifth best high school marching band in the 11 western states. As part of that band I had to walk over three miles of mostly commercial Long Beach real estate. :)

Laurie has graciously invited me to write regularly here on the subject of investing in real estate. What I do is get people from where they are now to an abundant retirement, usually sooner than they thought possible.

I think it’s appropriate to take some time to examine what’s going on in the economy, especially since interest rates, real estate values, the ability to buy property at all, and a potential recession are now the subjects of so much discussion.

It’s been almost a year and a half since Dr. Ben Bernanke, Ph.D, was installed as our new Federal Reserve Chairman. He’s already demonstrated some discernible differences between he and his predecessor, Allan Greenspan.

Where Greenspan seemed attracted to center stage, Bernanke appears to prefer remaining behind the scenes whenever possible. Greenspan paid attention to the money supply, but he much preferred to assert the Fed’s control using interest rates. In fact, he almost ran out of interest rates to cut, when we ended up with a Fed Funds rate of around 1% or so on his watch. Bernanke understands the crucial importance of interest rates, but is a believer, down to his DNA, in the influence of the nation’s money supply as his favorite economic tool.

Having Bernanke in charge of the Fed is what has me smiling, not frowning lately. He’s been an intense student of the crash of ’29 and the subsequent depression. In fact, he wrote a thesis on the subject many years ago, resulting in some pretty interesting parallels to our current circumstances. One of his conclusions? It was the Fed that probably pushed us over the edge into the Great Depression – needlessly. He wrote the whole thing should have, and could have been totally avoided. His reasons, knowing what we know today, are a result of rational thought, and based upon what I’ve always called economic physics.

What huge mistake was made by the relatively new Fed? After the ’29 crash, they constricted the money supply! This, at a time when money was needed more than ever. Their convoluted logic was that the economy was in the tank, so who needed money anyway? It was almost fatal.

Here’s where it gets eery. Bernanke wrote that the real estate collapse of ’27 was the first falling domino leading to the ultimate crash in ’29. Let that sink in for a moment.

Now some might call this a great leap of faith, but I’m thinking Captain Obvious is lurking close by. Do ya think he’s forgotten about what he believes? Do ya think just maybe, he’ll do whatever it takes to avoid a major real estate problem?

Now this opinion of mine, along with my heavily armed Starbuck’s card will get us both a cup of coffee, and an oatmeal raisin cookie. If you forced me to bet on our short term future, I’d put my money on Bernanke. How far am I willing to look into the short term future? The end of the year.

Bernanke has already said in very clear and precise words that he was, “…ready to do all things necessary…” to help keep the wheels of commerce rolling, including the housing sector.

I believe him – literally. It’s entirely plausible the Fed Funds rate will be at 4.5% by New Year’s Eve – possibly lower. This will, along with the increased money supply, have the desired effect on real estate.

Does that mean all is well? Not even close. It does mean, that we’ll probably look back and be able to say real estate began its u-turn in the first or second quarter of ’08. It’ll still take a long time to rid ourselves of the huge over supply of inventory currently on the shelves. In Phoenix for instance, only one of nine listings sell. That will change. Slowly – but it’ll change for the better.

The good news? Long Beach real estate is much better off – before all these future Fed moves.

Better (read: rational) underwriting, increased liquidity, a rising stock market, not to mention the continued solid job picture, will all combine to make our already robust economy pull itself away from the cliff’s edge.

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