[dev_dull]

> Because a housing crisis leads to skyrocketing home values. They benefit from increased housing prices.

That’s the point I’m trying to make. A home’s value is NOT liquid. You can’t extract any portion of it until you move. And you have to move AWAY to get that value.

The best you get is a relatively low interest HELOC but that’s hardly a money maker.

In fact a lot of people are stuck in their homes for that reason. Any move would be a 5x or 10x change in property tax bill.

[Kalium]

> The best you get is a relatively low interest HELOC but that’s hardly a money maker.

When your home is appreciating faster than the interest rate combined with property tax rate, it definitely can be a money maker.

[dev_dull]

You’re taking a loan out. How’s does it “make” money without negative interest rate? And I missing something??

[Kalium]

You have an asset. It's worth $1000. You borrow $1000 against it. The next year, after taxes and interest, you owe $1050. Meanwhile, the asset is now worth $1100. Your net worth has gone up and you have turned that appreciation into extra money to spend. You can do the same thing the next year, and your asset will be taxed as if it's worth $1010, and your net position is still in the black.

What you've perhaps missed, I think, is that property tax rates in CA don't scale with appreciation.

[triceratops]

> Any move would be a 5x or 10x change in property tax bill.

Nope. Prop 13 allows moves in the same county with no change as long as the new places is of equal or lesser value.