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I wish I knew the answer (I'm sure we all do) but I'm still seeing properties in my price range (550-700k) still dropping, though some obviously do sell.

I pay attention to the trends and the trend is still down overall. I think the next couple summers will tell us a lot. On the bright side, there is a chance somewhere between 0 and a cold day in hell that home prices in that segment will start trending up anytime soon, so I'm happy sitting here waiting a bit longer.

CrazyMan says

I wish I knew the answer (I'm sure we all do) but I'm still seeing properties in my price range (550-700k) still dropping, though some obviously do sell.

i'm seeing the same - the lower prices are giving me an itchy trigger finger to buy. but rationally i know i should wait for the prices to flattened out , and then go up a bit before i buy.

houses that were selling in the $700k range last year (and sold very quickly) are listed in the $600k range this year and sitting unsold.

SFace says

There's about a 250K millionaires in Santa Clara, San Mateo and San Francisco alone. In 20 years there may be well over 500K to over a million millionaires in the region (In fact you are on your way as well).

And as Bill pointed out, wealthy people including boomers pass their wealth.

I don't get the argument if everybody have to reset and buy today?

I question those numbers. And even if they are remotely accurate, many of those folks are classified as "millionaires" based on the value of their house, not because they are making huge money. My guess is many of these "millionaires" couldn't couldn't qualify for a mortgage on a starter home in San Jose at their current incomes.

Actually, if you do some research, you will find that Bay Boomers are much less likely to pass on wealth to their kids than in previous generations. This pretty much reflects the stereotype of Boomers being incredibly self-centered. More recent immigrants from different ethnic groups might be the exception to that though.

The point there is where will the large number of millionaires needed to soak up very expensive houses (when the current residents retire, downsize, or die) come from?

ducsingle5313 says

My guess is many of these "millionaires" couldn't couldn't qualify for a mortgage on a starter home in San Jose at their current incomes.

The affordability index came in at around single digits by 2004-5 I think.. something like only 6-9% could afford their own home.
I was one of those.. couldnt afford to my own home.

Pretty common across California, the whole index was changed to inflate the index.

E-man says

There is no reason to sell their home thanks to Prop 13.

You mean 58 and 193 maybe ? How about those who overpaid and carry a higher property tax 2x than had they waited as priced dropped 50%. Every reason to sell thanks to Prop 13 maybe.. some call it unfair. Too bad they are suckers.

What is Proposition 58?
Proposition 58, effective November 6, 1986, is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property between parents and children. Proposition 58 is codified by section 63.1 of the Revenue and Taxation Code.

2.What is Proposition 193?
Proposition 193, effective March 27, 1996, is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property from grandparents to grandchildren, providing that all the parents of the grandchildren who qualify as children of the grandparents are deceased as of the date of transfer. Proposition 193 is also codified by section 63.1 of the Revenue and Taxation Code.

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3.How do these Propositions work?
In the State of California, real property is reassessed at market value if it is sold or transferred and property taxes can sometimes increase dramatically as a result. However, if the sale or transfer is between parents and their children, or from grandparents to their grandchildren, under limited circumstances, the property will not be reassessed if certain conditions are met and the proper application is timely filed.

These propositions allow the new property owners to avoid property tax increases when acquiring property from their parents or children or from their grandparents. The new owner's taxes are calculated on the established Proposition 13 factored base year value, instead of the current market value when the property is acquired.