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I'm not going to argue with you but I'll point out a hole in your logic here: What matters is the sale price of recently sold houses to the incomes of those ac
by ChuckMcM 8y ago
I'm not going to argue with you but I'll point out a hole in your logic here:
What matters is the sale price of recently sold houses to the incomes of those actively searching to purchase a new home as well as how many such people there are in the market.
I agree with this statement, and as I see it, if the houses that were offered for sale were "unaffordable" then they would stay on the market for sale waiting for that special person who could afford them. Instead, what we're seeing is that houses sell, on average, in less than 30 days. So as callous as it might sound, people looking for homes are finding them and buying them. In Santa Clara county at a rate of about a 1,000 a month or 12,000 a year[1]. There are some interesting differential equations you can write that describe how quickly every home in the county will have changed hands at least once, but suffice it to say the narrative that a bunch of "grey hairs" who have bought and paid off their houses are just sitting in them is inaccurate.
As someone who lives in a home and neighborhood built in the 60's I can tell you, nothing motivates Grandma to move to Arizona faster than being able to cash out a million bucks into the savings account. We have exactly one original owner in the neighborhood and they are here because their kids (and grandkids) are also in the neighborhood, otherwise they would have moved as well.
[1] There were 482 homes sold in Santa Clara County last month. The average since 2000 is 987. -- https://urban.realtor/market-trends-report/ https://urban.realtor/market-trends-report/
- pcwalton 8y ago> As someone who lives in a home and neighborhood built in the 60's I can tell you, nothing motivates Grandma to move to Arizona faster than being able to cash out a million bucks into the savings account. We have exactly one original owner in the neighborhood and they are here because their kids (and grandkids) are also in the neighborhood, otherwise they would have moved as well. Well, the effective property tax rate in SF is 0.68% out of a nominal 1.19%, due to Prop 13. That indicates an awful lot of people who have held onto their houses for a long time.
- scurvy 8y agoHow did you arrive at 0.68%? I pay a lot more than that.
- pcwalton 8y agoIt's the effective tax rate you arrive at when averaging over the fair market value of all houses. It's much lower than the tax you or I pay due to Prop 13. The figure is from https://smartasset.com/taxes/california-property-tax-calculator https://smartasset.com/taxes/california-property-tax-calcula...
- scurvy 8y agoYeah well that stat isn't relevant because that's not the rate I actually pay. Literally couldn't care less what others pay. All stats are local.
- jacobolus 8y agoWhen people say housing is “unaffordable” they don’t mean literally no one can afford it. Obviously there is a lot of demand for housing and some people are willing to pay quite a lot for it. > We have exactly one original owner in the neighborhood This is not a good thing. Having whole extended families get priced out of a large region and only the wealthy or well-paid professionals able to move in, so that people performing all manner of support jobs need to commute from further and further away and live more and more precarious lives, is inefficient, socially/environmentally destructive, and makes the place less pleasant for everyone to live in. The whole Bay Area would benefit from housing prices coming down quite a bit after building a whole lot more housing units and transit.
- pcwalton 8y agoThough, ironically, the migration might be the only thing that keeps the schools running, because it results in more Prop 13 reassessments.