OT: California Dreamin': Density is the Future.

[mhespenheide]

Originally Posted by donevwil

Same thing here in Sonoma County, smaller houses are HOT and sell fast, while larger ones less so and take time to sell. My wife and I want to downsize, but it's ultimately a lateral move financially after all the expenses. A nice 1200-1300sf house in a similar neighborhood is only marginally less expensive than our 2300sf house.

I'd be happy to buy something small but high quality and then trade with you.

[Mr.Appa]

Originally Posted by prototoast

I can't speak to the details of his situation, but if I were to sell my house and buy a house valued at the exact same amount, my property taxes would increase by 60%

Not if you are 55 or older I thought? Can't you pay the same property taxes when downsizing (prop 19): https://www.boe.ca.gov/prop19/#FAQs

It feels like yet another way that you are penalized for being born in the last 30 years.

Sincerely,
A disgruntled millennial

[jimcav]

prop 19! i didn't follow it, but it will be relevant to us in the future

[Alistair]

Originally Posted by donevwil

My wife and I want to downsize, but it's ultimately a lateral move financially after all the expenses. A nice 1200-1300sf house in a similar neighborhood is only marginally less expensive than our 2300sf house.

That’s what we did when the kid moved out. Sold a SFH and moved a few mikes away into a more walkable neighborhood. House is smaller and cost the same as we sold the previous one but was totally worth it.

[MikeD]

=.RJ;3356923]Institutional investing makes up less than 5% of the single family home market.

Not according to this and other articles I've read lately. It's like 25% https://apple.news/AOM44gJsoQFSH-nDqddJz7A

"Bills from both Democrats and Republicans are popping up to make it harder for institutional investors to sweep up so many single-family properties that they affect affordability for both renters and would-be buyers.

That includes plans from Republicans to heavily tax large landlords to get them out of the business of single-family homes. There are also bills to cap ownership."

[.RJ]

Originally Posted by MikeD

Not according to this and other articles I've read lately. It's like 25% https://apple.news/AOM44gJsoQFSH-nDqddJz7A

"Bills from both Democrats and Republicans are popping up to make it harder for institutional investors to sweep up so many single-family properties that they affect affordability for both renters and would-be buyers.

That includes plans from Republicans to heavily tax large landlords to get them out of the business of single-family homes. There are also bills to cap ownership."

Article is paywalled by apple news.

I've seen similar figures thrown around - and its likely a clickbait headline thats something to the effect of "25% of houses sold last quarter/year [in a year with very low volume] in a specific market [that has other factors contributing] are going to institutional investors"

I am awful curious what bills that congress thinks will do any good. Most housing markets are far, far more influenced by town/county governments than anything federal. And most of the federal control is through FHFA, HUD and the GSE's, which dont require congress to change policy directions.

All that said, there's a real problem in a lot of markets, and those local governments are asleep at the wheel. They have the property tax lever available to deter multiple/corporate ownership and I dont see any of them using it. All the towns along the blue ridge were awful quick to pass new regulations that clamp down on air b&b rentals so why is this any different?

[verticaldoug]

https://www.minneapolisfed.org/artic...or-owned-homes

This is research isold, but it is a good overview of the workings of the market. Currently the number is around 25%, but I think it has become the focus of attention because the large institutions have been the most aggressive in raising rents. And rents are a large portion of recent sticky inflation.

You can also look at Pew Trust, Redfin, they all have research on this.

[.RJ]

Originally Posted by verticaldoug

https://www.minneapolisfed.org/artic...or-owned-homes

This is research isold, but it is a good overview of the workings of the market. Currently the number is around 25%, but I think it has become the focus of attention because the large institutions have been the most aggressive in raising rents. And rents are a large portion of recent sticky inflation.

I'm looking at this article, and the only places that high are in specific census tracts (1200-8000 people is the guide).

I'm not saying this isnt a real problem, because it is, but, I hate media clickbait headlines that dont really tell you the whole story. It does a huge disservice in shaping public opinion and policy.

[prototoast]

Honestly, worrying about investor s buying residential real estate becomes a non-issue if cities just market rate housing. Investor s are looking to rent out properties, so somebody still gets to live there. Rental properties become particularly attractive when housing is scarce because that gives a lot of pricing power to the landlords, but when housing is abundant, renting becomes much more affordable. That would be good.

So you allow more housing and you get some combination of cheaper rent or more home ownership, if the cheaper rent dissuades institutional investors.

On the other hand, if you have housing scarcity, to some extent you can make rules that affect who get s economic benefit, but those rules tend to be a zero-sum allocation, rather than an overall improvement in social welfare.

[benb]

Originally Posted by Mr.Appa

Not if you are 55 or older I thought? Can't you pay the same property taxes when downsizing (prop 19): https://www.boe.ca.gov/prop19/#FAQs

It feels like yet another way that you are penalized for being born in the last 30 years.

Sincerely,
A disgruntled millennial

That whole thing is ridiculous. The rest of the country has known real estate taxes were broken as hell in CA for a long time but I didn't know they'd passed this Baby Boomer protection program. For every one of these senior housing situations CA has created where someone owns a house and they couldn't own it if they had to pay a fair share of taxes there is likely another senior who is a multi-millionaire who is paying a pittance of taxes cause they gamed the system.

I wonder though if/when Gen X and Millennials finally take over... will they be smart enough in California to demand a change to a sensible real estate tax situation or will they just change it to grandfather themselves in and screw Gen Z or Alpha.

There was something I read recently that was disturbing. I get it Gen X and Xennials (like myself) are a baby bust and we will always be underrepresented as homeowners.

But Millenials are a big generation just like Boomers. And right now in the US apparently Baby Boomers own 2x more of the stock of 3 or more bedroom houses than Millennials, despite Boomers basically all being empty nest at this point. "Downsizing" has not really happened yet, they are still holding onto a large % of the housing stock across the country.

And at least what I have seen "downsize" often means "build me a 3000-4000 sq. foot condo with 3-4 bedrooms in a 55+ community" which means fewer houses being built that younger families can buy.

[jtakeda]

Originally Posted by benb

That whole thing is ridiculous. The rest of the country has known real estate taxes were broken as hell in CA for a long time but I didn't know they'd passed this Baby Boomer protection program. For every one of these senior housing situations CA has created where someone owns a house and they couldn't own it if they had to pay a fair share of taxes there is likely another senior who is a multi-millionaire who is paying a pittance of taxes cause they gamed the system.

I wonder though if/when Gen X and Millennials finally take over... will they be smart enough in California to demand a change to a sensible real estate tax situation or will they just change it to grandfather themselves in and screw Gen Z or Alpha.

There was something I read recently that was disturbing. I get it Gen X and Xennials (like myself) are a baby bust and we will always be underrepresented as homeowners.

But Millenials are a big generation just like Boomers. And right now in the US apparently Baby Boomers own 2x more of the stock of 3 or more bedroom houses than Millennials, despite Boomers basically all being empty nest at this point. "Downsizing" has not really happened yet, they are still holding onto a large % of the housing stock across the country.

And at least what I have seen "downsize" often means "build me a 3000-4000 sq. foot condo with 3-4 bedrooms in a 55+ community" which means fewer houses being built that younger families can buy.

This is a huge improvement on what it was before. Prop 19 amended the previous prop 60. They are essentially the same program with some small differences, but the biggest difference is prop 19 allows for the only ONE inter generational transfer while 60 allowed for unlimited.


It was a huge victory IMO and barely passed

[GregL]

Originally Posted by benb

But Millenials are a big generation just like Boomers. And right now in the US apparently Baby Boomers own 2x more of the stock of 3 or more bedroom houses than Millennials, despite Boomers basically all being empty nest at this point. "Downsizing" has not really happened yet, they are still holding onto a large % of the housing stock across the country.

As one of those aging boomers, I can tell you that we are staying in our homes because there are no reasonably priced, smaller homes to downsize into. I would love to find a smaller Cape Cod or ranch home on a smaller lot. Lower expenses and less time spent maintaining the property. Unfortunately, the only ones available are either junk or priced very high. First-time home buyers and aging boomers are vying for the same properties. This has pushed prices to previously unthinkable levels. So us boomers are holding on to our larger homes, hoping that this market eventually reaches some form of equilibrium.

Greg

[bigbill]

Originally Posted by GregL

As one of those aging boomers, I can tell you that we are staying in our homes because there are no reasonably priced, smaller homes to downsize into. I would love to find a smaller Cape Cod or ranch home on a smaller lot. Lower expenses and less time spent maintaining the property. Unfortunately, the only ones available are either junk or priced very high. First-time home buyers and aging boomers are vying for the same properties. This has pushed prices to previously unthinkable levels. So us boomers are holding on to our larger homes, hoping that this market eventually reaches some form of equilibrium.

Greg

This where we are. I bought 3/2 with a three car garage on a double lot in 2020. I got it for $40K under market because previous deals had fallen through. I also have a 2.75% mortgage, so downsizing means I'll likely pay more for less. We are house hunting in Wyoming this summer since neither of us wants to be in NW Arizona anymore. The road riding around here sucks, requiring tubeless 32s for my road rides because of road conditions. Where we live in Wyoming in the summer has incredible riding. It does get really cold in the winter, but we have a travel trailer to escape during the coldest months.

Housing prices in Wyoming are not terrible. I plan on putting 20% down and once we can move, put the AZ house on the market. When the AZ place sells, I'll restructure the mortgage by buying down the principle and shorten the length. My AZ neighborhood has many new construction homes, but they're all small on really small lots for families. My place is a snowbird palace with RV parking and BLM land across the back fence.