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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (43766)	10/28/2005 1:37:44 AM
From: Amy J	Respond to of 306849

Grace, RE: "Of course prop 13 provides an incentive to stay put" 1. Yet you argue prop 13 doesn't constrain supply. Prop 13 constrains supply, which increases pricing. Many elderly rent their homes in Paly because prop 13 gives them a discount on property taxes that makes it worthwhile to keep the home as an investment, thus reducing available supply. RE: "many houses change hands in CA every single year" 2. Where does it say those people have remained in CA? We have a net inflow because immigrants come to Calif. Meanwhile, - many CA residents move to AZ, Oregon etc to upgrade housing - many elderly residents (of the wealthier areas, not SJ) keep their CA homes for rental purposes while they themselves live in a rental in AZ ("prop 13 makes it foolish for me to sell my home - I can rent my home with a great ROI that I could never get if it weren't for prop 13 since my property taxes are reduced with prop 13.") So, the above counters your point that prop 13 is not reducing supply thus increasing prices. The actual answer is a hybrid approach: netflow & prop 13 are both contributing factors. Regards, Amy J