But why would they need to live nearby? Or have a similar house? Maybe as an empty nesters they can move to a smaller house and use spare change for other nice things?

If I walk into a room with 2 people and I offer one of them a million dollars to move to Cleveland, then one of them has something tangible and valuable that the other one doesn't. Older homeowners in markets that have seen a lot of appreciation are presented with this offer every morning when they wake up. Whether they take it or not is immaterial. It's a real offer that really exists.