[quote=flu]From what I know, the folks from the greatest generation (If you’re talking pre-baby-boomer) already have their homes paid off, and with $1000/year property tax.[/quote]
Yes, flu, I believe the vast majority of “greatest generation” homeowners in CA paid off their houses many, many years ago and did not borrow on the property again. Up until about 1964, 20-year fully-amortized fixed loans were still common. I don’t believe 30-year loans came into being until the late fifties. The average Prop. 13 property taxes on my block for original owners (or their heirs) who still own the property today is only $760 per yr.
[quote=CA Renter]Yes. I’m referring to their heirs of the Greatest Generation who would either move into their (paid off) parents house (realeasing their current home onto the market as a sale or rental), or they would have to sell the home in order to settle the estate, or sell it in order to buy another one more to their liking.[/quote]
If I was an heir of a CA homeowner whose taxes were protected by Prop. 13 (both my parents resided out of state when they died], I would find a way to buy out my siblings from a stepped up appraisal for the date of death and take the property. The condition or location would be unimportant to me. It can always be repaired/remodeled. If I didn’t want to live in that ‘hood anymore, I would rent it. An heir WILL NEVER HAVE ANOTHER OPPORTUNITY in their lifetime to obtain that tax treatment. Getting an estate deed or quit claim from a relative is the ONLY way to pass this coveted benefit down.
I agree that a baby boomer selling their current property to buy another one to retire in INCREASES RE TRANSACTIONS for the practitioners but there is no net effect on inventory. Quoting the First Tuesday article, page 2 (posted above),
“first tuesday forecasts a solid return of buyers to the housing market by 2015 , probably peaking in 2018, as the next and larger generation (Generation Y) of homebuyers looks to purchase their first residence. This influx of new homebuyers coincides perfectly with the beginning of the retirement boom, which will release thousands of boomer SFRs onto the market.
It remains to be seen, however, whether these old suburban SFRs will be of interest to young homebuyers. Signs indicate that demand, among the young as well as the old, will be for commuter-friendly property closer to the jobs and culture in urban centers. It will be the job of builders to create these urban residences, and the duty of brokers and agents to bring them to the public.” (emphasis added)
I agree that the “under 40” generation (maybe even a little older than that) typically does NOT want mom and dad’s 50’s to 70’s rambling ranch or large two story on a large lot. They’re not wired for CAT-5 and the under 40 crowd, in particular, cannot envision what the place would look like with a minor or slightly major facelift and xeriscape (to save water). It seems they would rather live further out of town in a “planned community” and pay MR and HOA. This is sad to me because most of these large suburban houses in CA to be dumped by downsizing baby boomers and even depresssion-era owners (born abt. 1930-1945) in the coming years are situated on large lots in some of the BEST and FINEST locations in the state which can never be duplicated :={
