After 33 years and four children, Baby Boomers Marta and Octavian Dragos say they feel trapped in what was once their dream home in El Cerrito, California.
Both over 70, the Dragos are empty nesters, and like many of their generation, they’re trying to figure out how to downsize from their 3,000-square-foot, five-bedroom home.
“We are here in a huge house with no family nearby, trying to make a wise decision, both financially and for our well-being,” said Dragos, a retired teacher.
But selling and downsizing isn’t easy, appealing or even financially advantageous for many homeowners like the Dragos family.
Many Boomers whose homes have surged in value now face massive capital gains tax bills when they sell. This is a kind of tax on the profit you make when selling an investment or an asset, like a home, that has increased in value.
Plus, smaller homes or apartments in the neighborhoods they’ve come to love are rare. And with current prices and mortgage rates so high, there is often a negligible cost difference between their current home and a smaller one.
One example given in the article shows the sellers would walk away with $1.55m after all taxes paid. I’m sure many would love to be so homeless.
The article also considers people buying a new place instead of renting. Yeah rent has also spiked, but that $1.5m still pays for 25 years of renting a condo for $5,000/month.
Also from the article:
“Both over 70, the Dragos are empty nesters”
So the essentially have rent paid for until they are 95 or 104 just from the sale of their house.
I mean how are they going to make it by on their pension and social security??? It’s just not fair! /s