According to Freddie Mac the average 30 year fixed mortgage rate in the US is now 5.11%.
The rate increase means a buyer’s payment is 24% more expensive than 2021.
If you include a 10% price increase from 2021, then a new buyer’s payments would be 36% more expensive!
Do you think this will just cool off the market or cause prices to fall? Please let me know.
One of the barriers to California Homeowner’s selling is their low tax basis.
In California, thanks to Proposition 13, property taxes can only increase 2% a year unless a home has undergone construction or a change of ownership.
Homeowners who have lived in their home for a long period become stuck in their home because they would face a large property tax bill increase once moved to the new residence.
Fortunately in 2020 California passed Prop 19 which gives homeowners the option to sell, purchase a new primary residence and keep their low tax basis.
Prop 19 applies to people 55+, severely disabled, families and victims of wildfire or natural disasters.
Prop 19 allows eligible homeowners to transfer the taxable value of their existing primary residence to a new replacement primary residence.
The replacement residence can be of any value, and anywhere within the state. The exclusion can be filed up to three times by a property owner over their lifetime.
If your new home is more expensive, there will be an upward adjustment.
You can transfer your tax basis anywhere in California. No longer limited to certain counties like Prop 60/90.
There are fine print and conditions that go along with any proposition.
Please contact me if you are considering taking advantage of Prop 19.
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