Policy Information • February 20, 2026

Capital Gains + Prop 19 & What you should know

by James Cool

CA Prop 19: What 55+ Homeowners Should Know

One of the biggest reasons long-time homeowners hesitate to sell is fear of taxes.

Specifically, two concerns come up over and over:

Losing a low property tax base
Getting hit with large capital gains taxes

However, many homeowners are surprised to learn that the situation isn’t always as bad as they assume.

Let’s break this down clearly.

Proposition 19: Transferring Your Property Tax Base

If you’re 55 or older, California’s Proposition 19 may allow you to transfer your current property tax base to a new home anywhere in the state.

That’s a major shift from prior rules.

Previously, transfers were limited to certain counties. Now, qualifying homeowners can move anywhere in California and potentially carry their lower tax base with them.

Even if the new home is more expensive, you may still be able to transfer your base — though the difference in value is added to your taxable amount.

In other words, you’re not automatically starting from scratch.

For official details, you can review guidance directly from the California State Board of Equalization:

Proposition 19 – California Board of Equalization

Capital Gains Exclusion

Next is capital gains.

If the home has been your primary residence for at least two of the last five years, you may qualify for:

Up to $250,000 capital gains exclusion (single)
Up to $500,000 exclusion (married couples)

That means a large portion of your gain could be tax-free.

In addition, your adjusted basis includes certain improvements made over the years. Closing costs also factor into the calculation.

As a result, many homeowners owe far less than they initially expect.

For official information, you can review IRS guidance here:

Topic No. 701 — Sale of Your Home | Internal Revenue Service

Why This Matters

The biggest barrier I see isn’t always the numbers. It’s uncertainty.

When people assume they’ll lose their tax base or owe massive capital gains, they often decide not to even explore their options.

However, once we run the actual numbers, the picture is usually much clearer.

And sometimes, much more favorable.

The Bottom Line

I’m not a CPA, and every situation is different.

That said, clarity removes hesitation.

If you’d ever like to understand:

What your estimated proceeds might look like
How Prop 19 could apply to your situation
What your new property taxes might be

I’m happy to walk through it with you.

No pressure. Just information.

You can call or text me directly at (714) 925-3094.

News • February 20, 2026

Housing & Interest Rates – Early 2026

by James Cool

What Buyers and Sellers Should Know

I’ve been getting a lot of questions lately about interest rates, the Fed, and what it all means for housing.

Instead of reacting to headlines or hot takes, let’s break this down clearly. Here’s what’s happening — and more importantly, what it means for buyers and sellers right now.

Where Mortgage Rates Stand

First, the good news.

Mortgage rates have eased from their recent highs and are sitting around 6.1%. That’s still higher than pre-pandemic levels. However, it’s an improvement compared to where we were a year ago.

So yes, rates have come down. But no, we’re not back to 3%.

What the Federal Reserve Is Doing

The Federal Reserve has held rates steady and is signaling caution before cutting further.

In other words, they’re not rushing.

Because of that, mortgage rates are unlikely to drop sharply overnight. Even if the Fed eventually cuts rates, those changes don’t always translate directly or immediately into lower mortgage rates.

Why Mortgage Rates Don’t Move Exactly with the Fed

This is where it gets important.

Mortgage rates are tied more closely to long-term bond markets than to the Fed’s short-term rate decisions. As a result, broader economic conditions, inflation data, and investor sentiment all play a role.

So even when rate cuts are expected, the drop in what buyers actually pay can be gradual.

That’s why trying to perfectly “time the bottom” is extremely difficult.

What This Means for Buyers

If you’ve been waiting for rates to fall further, understand this: improvements are happening, but they’re happening slowly.

Meanwhile, inventory in many parts of Orange County remains tight. When rates dip even slightly, buyer activity tends to pick up.

So instead of trying to predict the exact bottom, it may make sense to:

Explore your options now
Run the numbers at today’s rates
Consider locking in if you find the right property

Remember, you can refinance later. But you can’t go back and buy the house you missed.

What This Means for Sellers

At the same time, we’re in a more balanced environment than the frenzy of 2021 and early 2022.

Buyers today are more payment-sensitive. They’re calculating monthly costs carefully. As a result, pricing strategy matters more than ever.

Homes that are positioned correctly still move. However, overpricing and “testing the market” usually lead to longer days on market and larger price adjustments later.

Strategic pricing and flexibility win in this environment.

The Bottom Line

Rates are improving, but they aren’t collapsing.

The Fed is cautious, and mortgage markets are influenced by more than just one decision.

Because of that, both buyers and sellers need to make decisions based on current conditions — not speculation.

As always, real estate is personal and hyper-local. If you want to walk through what today’s rates mean for your buying power, your home’s value, or your long-term strategy, let’s talk.

For more information, check out these sources:

https://apnews.com/article/mortgage-rates-housing-interest-financing-home-449e32375dcfa96e6d94ff0cb10df572

https://www.bankrate.com/mortgages/federal-reserve-and-mortgage-rates/?

https://www.barrettfinancial.com/calmira/blog/understanding-fed-rate-changes-impact-on-mortgage-rates-and-home-sales?

Policy Information • February 20, 2026

New California Housing Laws Could Impact Orange County Real Estate

by James Cool

California recently passed a major set of housing reforms. These laws begin taking effect in 2026. While they apply statewide, they could absolutely affect Orange County.

So what’s the goal?

Simply put, the state wants more housing. And to do that, lawmakers are trying to make it easier and faster to build.

Specifically, the new laws focus on streamlining approvals. In addition, they adjust zoning rules near transit. They also aim to reduce certain permitting barriers that have slowed projects for years.

In short, the state is trying to remove friction from the development process.

What Could Change Locally?

First, we won’t see overnight changes in Huntington Beach or across SoCal. However, over time, these policies can shift supply trends.

Here are a few highlights:

Faster permitting timelines for qualifying housing projects
More flexibility around density in certain areas
Continued pressure on cities to meet state housing targets
Potential long-term impact on inventory and pricing

Because Orange County is largely built out, new construction doesn’t usually mean massive subdivisions. Instead, it often means redevelopment. For example, think infill projects, mixed-use buildings, or higher-density housing near transit corridors.

As a result, certain pockets may see more change than others.

Why This Matters

Policy shapes markets. Sometimes slowly. Sometimes in ways that aren’t obvious at first.

For instance, zoning flexibility can increase land value in specific areas. On the other hand, increased supply could ease pressure in certain price points over time.

That said, every city responds differently. Implementation matters just as much as legislation.

The Bigger Picture

These reforms are part of California’s broader push to address affordability. The state has missed housing production targets for years. Now, it’s putting more pressure on cities to perform.

However, whether these changes dramatically shift the market remains to be seen.

What we do know is this: long-term supply trends influence property values, redevelopment potential, and investment strategy.

What This Means for You

If you’re a homeowner, it’s worth understanding how zoning or density adjustments could affect your neighborhood long term.

If you’re a buyer or investor, this could create opportunity. But only in certain areas. And only if you’re paying attention early.

As always, real estate is hyper-local.

If you’re curious how these new housing laws could impact your specific property or neighborhood in Orange County, I’m happy to take a closer look.

You can call or text me directly at (714) 925-3094. (more…)

News • February 20, 2026

OC Spring Market Update

by James Cool

Orange County Real Estate Update: Spring Activity Is Picking Up

I wanted to share a quick Orange County market update as we move further into the spring season.

Over the past couple of weeks, there’s been a noticeable shift in activity. The data is giving us a pretty clear picture of where things stand — and overall, this looks like a healthy spring market forming.

Inventory Is Growing — And So Is Buyer Activity

As of early February, across Orange County:

3,336 active listings (up from 3,275 the week prior)
634 new listings hit the market in just the past 7 days
1,570 homes currently under contract or pending
325 homes closed in the last week alone

This is what we typically expect to see as we move into spring. More sellers are coming to market, and buyers are responding.

Based on current pace, overall transaction volume this year should exceed last year’s totals.

Homes Are Moving Faster

One of the more interesting shifts:
Median days on market dropped from 44 days to 31 days week-over-week.

Here’s how that breaks down by price range:

Under $1M → 34 days
$1M–$2M → 25 days
$2M+ → 47 days

A big reason for the drop is fresh inventory entering the market. In January alone, 2,005 new listings came on — and 261 of those have already accepted offers.

Buyers are acting quickly when homes are priced appropriately. The market is rewarding strategy.

Negotiation Trends

Overall, homes are selling about 3.1% below list price on average.

For properties under $2.5M, the average negotiation gap is roughly 1.3% — about $15,000.

Higher-end properties are seeing wider negotiation margins, while the core market (that $800K–$2M range) remains relatively balanced.

We’re not in a frenzy market — but we’re also not in a slow one.

Price Snapshot

Current median pricing across the county:

Median list price (Single Family): $1,937,500
Median list price (Condos/Townhomes): $850,000
Median closed price (SFR, last 7 days): $1,373,750
Median closed price (Condos, last 7 days): $815,000

Orange County continues to offer a wide range of opportunities — from entry-level condos starting around $250,000 to luxury estates exceeding $10M.

It’s not one market. It’s multiple micro-markets moving at different speeds.

Huntington Beach Snapshot

Huntington Beach continues to show resilience.

197 active listings
96 homes under contract or pending
Median days on market: 28
Average single-family list price: $2.4M

Well-priced homes are attracting strong interest, especially in desirable pockets and updated properties.

What This Means

For Sellers

Spring demand is here. Inventory is rising, but buyers are active and motivated. Strategic pricing and strong presentation matter more than ever.

The homes that are winning right now are positioned correctly from day one.

For Buyers

More options are coming online each week. That’s good news. But well-positioned homes are still moving quickly, especially in that core price range.

Preparation and timing are everything.

If you’re thinking about selling, understanding your home’s current value is the best first step. I’m happy to run a detailed valuation and break down exactly how your neighborhood compares to current activity.

And if you’re watching specific areas like Huntington Beach, Costa Mesa, Fountain Valley, or Newport, I can send hyper-local updates tailored to what you’re looking for.

Let me know if you’d like a breakdown specific to your property or your goals.