If you were already discouraged by low housing inventory and supply in the San Francisco Bay Area, there is little reason to hope that it will improve for the foreseeable future.
Some factors include:
- The two percent (2%) per annum Proposition 13 tax cap that encourages long term holding of California Real Estate;
- New Federal Tax Law limiting mortgage deduction to $750,000, but grandfathering in pre-existing home owners $1,000,000 mortgage deduction;
- New Federal Tax Law limiting State and Municipal real property tax deduction to $10,000 per year;
- Rising Interest Rates making mortgage financing more expensive.
Other factors influencing selling v. holding include suitability as rental property and estate planning desire to pass on the real property “in kind” to your children who may inherit the pre-existing lower tax base.
In summation, why sell your home, if buying another home in the same area will significantly increase your financing costs and taxes.
