California is one of the most expensive housing markets and Proposition 13, a 1978 amendment to the state's constitution, makes it more expensive to move. Wall Street Journal staffer Katy McLaughlin takes a look at the amendment which capped future property-tax increases at 2% a year, with the caveat of reassessing the property after home sale based on its current sale price which leads to a large tax increase.
Due to this tax increase, many Californians find it more beneficial to renovate their own homes to increase value as well as stay in place longer, an average of 1.4 years longer compared to other states:
In coastal cities, the “lock-in effect,” as the study called it, is even higher. Homeowners in Los Angeles stay put over two years longer, and San Francisco homeowners keep their homes over three years longer than homeowners in other states.