One thing I think many people underestimate in California is how many homes are being held long term by homeowners who are 55 and older. Not because they necessarily want to stay forever, but because financially, moving often has not made sense.
Many of these are the homes where people raised their children decades ago. The kids have moved out, although in today’s economy some are staying home longer than expected. Entire bedrooms may sit unused most of the year. The stairs are harder than they used to be, or may become that way over the next decade. The yard takes more maintenance. The house may no longer fully fit their lifestyle, needs, or long-term goals.
But for years, downsizing in California could actually increase monthly costs instead of lowering them because of property taxes and affordability.
Under California Proposition 13, many longtime homeowners have property tax bases tied to values from decades ago. That became one of the biggest financial advantages of long-term homeownership in California.
The challenge was that if they sold and purchased another home, property taxes could reset based on today’s market value. Previously, many tax base transfers also had county and value limitations, which became harder to navigate as California home prices appreciated over time. At the same time, many of these homeowners built far more equity than they ever imagined they would.
So even if someone wanted a smaller home, a single-story layout, less maintenance, or to move closer to family, many homeowners still felt financially trapped in place because moving often meant giving up the low tax basis they had spent decades building.
That dynamic has had a major impact on housing inventory overall. Homeowners are staying in their homes longer, and recent reporting from Realtor.com using ATTOM Data showed homeowner tenure reached record highs at the end of 2025. That is part of why inventory can feel so tight, especially in established neighborhoods throughout Southern California.
And that is exactly why California Proposition 19 became such a major shift.
Proposition 19 was approved by voters in 2020 and took effect for base year value transfers beginning April 1, 2021. Information from the California State Board of Equalization explains that eligible homeowners who are 55 or older, severely and permanently disabled, or victims of qualifying disasters may transfer their existing property tax base to a replacement primary residence anywhere in California.
In simple terms, eligible homeowners may be able to move without completely starting over at today’s taxable value. If the replacement home is equal to or less than the value of the home being sold, the taxable value may transfer. If the replacement home is more expensive, the homeowner may only be reassessed on the difference in value rather than the full purchase price.
And that flexibility goes further than many people realize, because eligible homeowners 55+ can now use this benefit up to three times during their lifetime.
That is a much bigger deal than many people realize.
For many homeowners 55+, Proposition 19 created flexibility that simply did not exist before. It gave people the ability to consider downsizing, relocating closer to family, transitioning into a retirement community, or moving into a home better suited for aging in place without automatically giving up one of their biggest financial protections.
Because for many people, the issue is not whether they want to move. It is whether moving still makes financial sense after decades of owning a home with a much lower tax basis.
A home is not just square footage. It is where people raised families, celebrated holidays, built routines, and spent decades of their lives. Moving on from that chapter can feel overwhelming emotionally, even before the financial side is considered.
But Proposition 19 has started changing those conversations. For some homeowners, learning they may be able to carry over their tax base is the first time downsizing actually begins to feel possible instead of financially unrealistic.
At the same time, staying put also requires planning. AARP reports that roughly 75% of adults age 50 and older want to remain in their current home as long as possible, though many also recognize their housing needs may change over time. That is why I think Proposition 19 should not only be viewed as a downsizing tool. It is really a planning tool.
For some homeowners, staying put may still make the most sense. They may want to renovate, adapt the home for aging in place, or maximize the property they already have. For others, downsizing may open opportunities to reduce maintenance, lower long-term expenses, free up equity, move closer to family, or transition into a home that better fits the next stage of life.
And for some homeowners, this may even create opportunities to think differently about how they use their equity altogether. That could mean purchasing a duplex or multigenerational property, creating future rental income, helping adult children with housing, or planning more intentionally for retirement and long-term financial stability.
Because the reality is, many longtime California homeowners are sitting on significant equity, but have never fully evaluated what options that equity may create for them now.
The earlier homeowners start thinking strategically about these decisions, the more flexibility and control they usually have long term.
For many homeowners 55+, the question is no longer simply, “Should we move?”
The better question is, “What would position us best for the next 10 to 20 years?”
And in a state where affordability, inventory, aging in place, insurance costs, and long-term housing strategy are becoming increasingly connected, that flexibility matters more than ever. Especially in a market where replacement homes often cost more than expected, understanding your options and planning thoughtfully can make a major difference long term.