San Diego demographer John Weeks claimed the older population is “loath to part with their homes,” which is contributing to the housing shortage.
He doesn’t get it. Many seniors would like to part with the two-story homes they have lived in for many years, and maybe move to a one-story home, but there are almost no such homes for sale. In some cases, high federal and state capital gains taxes could total 33 percent or more on the sale of their old home, which would not leave them enough money to buy the new home. The property tax on the new home could easily be double what they are paying on their old home.
If they need a mortgage on the new home, the current rates have almost tripled from about 2.5 percent to about 7 percent in the past three years, causing huge, unaffordable payments.