Somewhere around 30% of the homes in the country have no mortgage (that’s a negotiable stat in CA, I couldn’t find a CA number I trusted). Many of these are owned by older people and here in CA, prop 13 creates a situation where it is more beneficial to keep a home in the family when people die or need different living arrangements. This is why I am hesitant to factor in pure baby boomer stats as future inventory. In my own family, we never parted with R/E that was purchased in the 1970’s or earlier, maybe one or two of the kids buys out the others, maybe it became a rental if nobody needed or wanted to live there, but you think long and hard about selling it because of the property tax implications. My grandmothers house which she bought in the 1950’s had a yearly tax bill of something like $500 and was worth 500k, that’s 1/10th of a percent and the taxes don’t reset if transfered between family members or kept in trust, you just dont give that up without careful consideration. Prop 13 was designed to help older homeowners and 30 years later, we will see if it has an effect, but if I was livig in a paid off house with a $50 monthly property tax bill, I don’t know if I’d leave until they carted me off, then my kids would probably think long and hard about selling the only house they will ever be able to have where they essentially don’t have to pay property taxes on.
