“4th, Prop 13 has a huge impact here because long time owners dont get re-assessed every year. Back where I grew up, tax are re-assessed each year. Eventually they get excessive for the retirees who move. When I think back to where I grew up, within 5 years of their last child graduating from college I cant think of a single parent that stayed in their homes located in the high tax rate prime school districts. Around here they stay because the taxes are low which keeps inventory constrained to a degree not found in other states.”
Thank you sdr! I wanted to try to articulate this point as well but I was too lazy. You conveyed it nicely. When I moved to North Carolina in 2004 my property taxes started out at around 5-6k By the time I sold 5 years later they were up to around 9-10k. Older folks tend to get priced out of their houses which adds significantly to the supply. This is part of the reason I refer to SD as a “supply-constrained” market (especially the older “built-out” neighborhoods).
In my neighborhood in mission hills, there are properties with a tax assessment of 2M+ that are immediately adjacent to similar properties with a tax assessment of 200k. Where else in the country outside of California can you find this?
