3 ms·

Their houses are paid off and they are locked in to low property taxes.

01100011 7y ago
You could sell your bay area house for $1M and buy a palace in AZ for half that. That leaves you with a nice chunk of change to pay property taxes with.
- cameldrv 7y ago
  But it's unnecessary. If you bought your 3 bedroom house in Cupertino in 1978 for $60k, you're paying taxes on about $140k, so about $1400 a year. These people can live on just Social Security. If they can easily afford to stay where they are with all of their friends and community, in a spectacular climate, not have to deal with the hassle of moving or maintaining a larger house, and pass a $2.5 million asset to their kids, why would they move?
  - 01100011 7y ago
    > why would they move? To follow their children who probably left the bay area so they could raise a family? To escape the cold and humid winters of this 'spectacular climate'(seriously, that's a very relative opinion. San Diego was better. Phoenix is fine if you have AC). To not have to deal with the hassle of maintaining a 40-60 year old house? To not have to pay some of the highest state income taxes around? To reallocate their assets to a growth vehicle and pass on more wealth to their children(seriously our market is maxed for now)? To live near millions of people in their age bracket in an environment that caters to them? To have access to superior medical care(IME, South bay sucks. San Diego is better. Phoenix is better. San Antonio is better. etc...). CA is generally a horrible place to retire unless you have money to burn. If I were 65+, had children, and owned a house in the south bay, I would leave in a heartbeat unless my children were working FANG jobs in the same area of the bay.
- mathattack 7y ago
  The economics work better for renters that are moving, rather than owners. For an owner, their property taxes are lower than it would be with a new house out of state. If they want they can borrow against the home value to access the equity. Their income is lower, so less attraction moving to a lower tax state.

You could sell your bay area house for $1M and buy a palace in AZ for half that. That leaves you with a nice chunk of change to pay property taxes with.

cameldrv 7y ago
But it's unnecessary. If you bought your 3 bedroom house in Cupertino in 1978 for $60k, you're paying taxes on about $140k, so about $1400 a year. These people can live on just Social Security. If they can easily afford to stay where they are with all of their friends and community, in a spectacular climate, not have to deal with the hassle of moving or maintaining a larger house, and pass a $2.5 million asset to their kids, why would they move?
- 01100011 7y ago
  > why would they move? To follow their children who probably left the bay area so they could raise a family? To escape the cold and humid winters of this 'spectacular climate'(seriously, that's a very relative opinion. San Diego was better. Phoenix is fine if you have AC). To not have to deal with the hassle of maintaining a 40-60 year old house? To not have to pay some of the highest state income taxes around? To reallocate their assets to a growth vehicle and pass on more wealth to their children(seriously our market is maxed for now)? To live near millions of people in their age bracket in an environment that caters to them? To have access to superior medical care(IME, South bay sucks. San Diego is better. Phoenix is better. San Antonio is better. etc...). CA is generally a horrible place to retire unless you have money to burn. If I were 65+, had children, and owned a house in the south bay, I would leave in a heartbeat unless my children were working FANG jobs in the same area of the bay.
mathattack 7y ago
The economics work better for renters that are moving, rather than owners. For an owner, their property taxes are lower than it would be with a new house out of state. If they want they can borrow against the home value to access the equity. Their income is lower, so less attraction moving to a lower tax state.