00:00If you still think the only problem with the California housing market is that prices are too high...
00:04You may have underestimated the truly terrifying aspect of this crisis.
00:07Because many young people in California are facing this now.
00:10It's no longer about not being able to afford a house.
00:11Instead, they're almost losing the ability to even enter the game.
00:14Latest data
00:16Los Angeles and other cities in Southern California
00:18Housing swimming rate among young people aged 25 to 34
00:21Only 10.5% remains.
00:23Lowest in the US
00:25Los Angeles County even saw a drop to 9.8%.
00:29in other words
00:29Today, 90% of young people in Los Angeles do not own a home.
00:33But the real danger might not be this.
00:35But it's just when young people are increasingly unable to afford houses.
00:38More and more California real estate
00:40They have even stopped trading on the open market.
00:4216% of California homes will see title changes by 2025.
00:46It wasn't completed through buying and selling at all.
00:48Instead, it is through family inheritance.
00:50In other words
00:51Nearly 50,000 houses per year
00:53It is not listed on the stock exchange.
00:55No open house
00:56There was no bidding.
00:57Property rights?
00:58Directly transferred from parents to the next generation
01:00In Monterey
01:02Napa
01:02And what about affluent areas like Sanna Barbara?
01:04More than a quarter of the properties
01:06It never entered the market from beginning to end.
01:08They were simply completing the handover within the family.
01:11Once upon a time, relying on personal struggle
01:13The California Dream of Achieving Upward Mobility
01:15It is slowly becoming
01:16A game of wealth inheritance based on bloodlines
01:20Hello everyone
01:20I am Sun Sitao
01:21What about today's video?
01:22We're not just talking about housing prices.
01:24What we really want to dismantle is
01:26Why is California real estate so popular today?
01:28It's increasingly resembling a hereditary succession system.
01:31And why are more and more young people working hard?
01:34I'm starting to realize that I may never be able to participate in this game.
01:38Let's first zoom out and look at the entire US housing market.
01:41Early 2026
01:42The market had initially thought the property market could finally breathe a sigh of relief.
01:46Because of this
01:46What about housing interest rates in the first quarter?
01:48A brief pullback
01:49What about housing affordability in California?
01:51It even rebounded to its highest level in four years.
01:53twenty two%
01:54But this window...
01:55Soon to be geopolitical risks
01:57This geopolitical shattering
01:58Late February
01:59What happens after the situation in the Middle East escalates?
02:01The market is starting to worry again.
02:02For example, oil prices.
02:03Inflation
02:04There are also accidents.
02:05And the long-term interest rate
02:06The result...
02:07US 30-year fixed mortgage rate
02:09In just 10 days
02:10It surged by 33 basis points
02:11So what's the question?
02:12It's not just high interest rates
02:13The real danger
02:14American real estate
02:15Re-exposed to this interest rate volatility
02:18What about the decade or so following the 2008 financial crisis?
02:20Americans are actually used to it.
02:22This low-interest-rate environment
02:23Mortgage rates are stable
02:24What about asset prices?
02:25Steady rise
02:26Where is everyone?
02:27All default
02:27Every year people say that interest rates will be cut sooner or later.
02:29But what about now?
02:30The bond market begins to repric.
02:32Another risk
02:33That war
02:34deficit
02:35Energy prices
02:36This long-term inflation
02:37What the real estate industry fears most
02:39It's never just about high interest rates.
02:41Instead, what?
02:41Uncertainty
02:42High interest rates plus this uncertainty?
02:44Like forceful intercourse
02:46Directly targeting the US housing market
02:47Freeze
02:48The real impact of war
02:50More than just oil prices
02:51It is through this bond market
02:52Repricing
02:54Housing costs for the average American
02:56According to the National Association of Housing Finance
02:57Latest data from NAR
02:59April
02:59U.S. sales of Ukrainian products
03:01After annualization?
03:02Only 4.02 million sets
03:03What about month-on-month comparison?
03:04It only increased by 0.2%.
03:06Almost stagnant
03:07But what about the other side?
03:08US stock market...
03:09US stocks are still hitting new highs.
03:10So what happens then?
03:11The US economy experienced a [situation/event].
03:12A very disjointed scene
03:13What about asset prices?
03:14Continue to rise
03:15This cash flow for an average family
03:16And this financing capability?
03:17But it continues to worsen
03:19And then...
03:19A market has emerged
03:20A truly absurd phenomenon
03:21You are in some places in the United States now
03:23Their local
03:24This is a second-hand house.
03:25It might be more expensive than a new house.
03:26The US in April, taking Ukraine
03:27What about the median house price?
03:29It is $417,700
03:31What is the median price of this new house?
03:33Approximately $387,400
03:35New house
03:36It actually saved $30,000.
03:37Why is this happening?
03:38Because of a large number of old homeowners
03:40They simply don't want to sell the house.
03:41Many people received 2%.
03:43This is an extremely low 3%.
03:44Long-term mortgage
03:45If we sell the house today...
03:46If you buy another house?
03:47What about its monthly payment?
03:48It will surge instantly.
03:49So...
03:50The entire second-hand housing market
03:52What about liquidity?
03:52Locked
03:53No one is selling houses
03:54so what
03:54Resale inventory
03:55It will become less and less.
03:56On the other hand...
03:57Developers face
03:58High interest rates
03:59I've talked about this before.
04:00High building material costs
04:01High labor costs
04:02So, in order to survive?
04:03Promotions are the only option.
04:04For example, subsidies
04:05Transfer fee
04:06The interest rate for buying out a portion of it.
04:08This accelerated the destocking process.
04:09So...
04:10Today's US real estate
04:11It has begun to split into
04:12Two parallel worlds
04:13What about the second-hand housing market?
04:15Where is the homeowner?
04:15Unwilling to sell
04:16New housing market
04:17What about the developers?
04:17Price cuts to survive
04:18That's even more crucial...
04:20This housing demand...
04:20It didn't actually disappear.
04:22According to the latest housing data from NAR
04:24April
04:24Homes Sold Nationwide
04:26This sales volume?
04:27Month-on-month and year-on-year comparisons
04:28They are all growing.
04:29That means...
04:30The problem with the US real estate market today
04:32It's not that no one wants to buy a house.
04:33Instead, more and more people want to buy
04:35But it's becoming increasingly unaffordable.
04:37This housing gap
04:38It still exists.
04:39Getting married
04:40Having a child
04:41Moving is a basic necessity.
04:42They're all still here.
04:43The truly destroyed
04:44It is an ordinary family
04:45Its financing capabilities
04:46This is why
04:47Today's US housing market
04:48It's becoming less and less like 2008.
04:50What about 2008?
04:51It is the collapse of trust.
04:52And today?
04:53It's more like a freeze on liquidity.
04:55What about US housing prices?
04:56It may not crash
04:56But what about market liquidity?
04:58It is actually disappearing
04:59More and more properties
05:00Withdrew from open market trading
05:02More and more young people
05:03Disqualified from entry
05:04More and more wealth
05:05Beginning within the family
05:07Complete the handover and succession
05:08So, if we're talking about the issue of housing in the United States...
05:11If liquidity is frozen
05:12The California issue...
05:13Actually, it has already entered another stage.
05:15This means the clearing out of social classes.
05:17What about the first quarter of this year?
05:18Buy a house in California with a loan
05:20What about a mid-range house costing $840,000?
05:22Minimum annual income required
05:23$204,800
05:25Pay attention!
05:26This is the minimum threshold.
05:27Monthly principal and interest
05:28In addition to all sorts of taxes and fees
05:30More than $5,100
05:31And what about the median household income in California?
05:34Just over $100,000
05:35In other words...
05:36More than 80% of California households
05:38Theoretically, it has been eliminated from the detached house market.
05:41What about the young people?
05:42Actually, it's more serious.
05:43That bucket-stained machinery
05:44What about homeownership rates among young people?
05:46Only 9.8%
05:47Presentation
05:48That's roughly 13.2%.
05:50So why can't young people save money for their next loan?
05:52Because of the rent.
05:53It is devouring everything
05:54What is the median rent in California now?
05:57It's $2759
05:58On average across the US?
06:00Only $1,910
06:01The young man was paying the highest rent in the entire United States.
06:04On one side
06:05To meet the $200,000 mortgage income threshold
06:07So...
06:08A change began to emerge in the whole society.
06:10The end of being the richest man
06:11It's no longer personal savings.
06:13Instead, it was the parents' sponsorship.
06:14Based on my years of experience on the streets of Southern California
06:16And the ear gate
06:17Based on actual contact with the real estate market
06:19Today, these young buyers who can still afford a small apartment...
06:22Almost
06:23They all need their parents' support.
06:24What truly locked all of this down
06:26Actually, it's California Proposition 13, which was implemented in 1978.
06:29Simply put, it is...
06:31It limited the increase in property tax.
06:32The result was that many long-time homeowners...
06:34Even though the house has risen to several million dollars
06:36But what about their property taxes?
06:38It remains at the level it was decades ago.
06:40So as long as they don't sell the house...
06:42What about holding costs?
06:43Very low
06:43They can even rent out the houses!
06:46And this debt financing Refinance
06:48Also, home equity loans
06:49These methods?
06:51Continuously increasing the wealth from the house...
06:52Extracted from the house
06:54On the contrary?
06:55If they choose to sell the house now
06:56They would simultaneously lose their very low-interest mortgage loans.
06:59There are also tax machines with low tax bases.
07:01There are also very low holding costs.
07:03Therefore, most homeowners are actually unwilling to sell.
07:05At the same time?
07:06What about this wealth inheritance mechanism?
07:08Another soul-sealing formation was formed.
07:09The house will be left directly to the next generation.
07:11So what?
07:12Real estate is increasingly becoming a kind of
07:13Generational residence permit
07:14Who owns a house in this family?
07:16Can I still stay in California?
07:17What about people without a house?
07:18Long-term rentals are the only option.
07:19Or forced to leave
07:20So today's California...
07:22The most dangerous problem
07:23It's no longer just about rising housing prices.
07:24Instead, more and more young people are beginning to believe
07:27No matter how hard I try
07:28California Dream Door
07:29It may never be opened again.
07:30And once a society begins to lose
07:32If you believe that hard work can change your destiny...
07:35The consequences
07:36Often more severe than an economic recession
07:37The past
07:38Real estate is more like an ordinary family.
07:40This ladder to wealth accumulation
07:42But now it's increasingly resembling a kind of...
07:44Only those who already own assets
07:45Only then can the wealth inheritance tools continue to be used
07:48That determines whether young people can stay in California.
07:50Increasingly not wage income
07:52Rather, family assets
07:53This may be the reality of the American West Coast today.
07:55The deepest changes in the real estate market
07:57So what do you think about the future of young people in California?
07:59If not dependent on family wealth
08:01Is there still a chance to buy a house?
08:02Your city
08:03Are you also starting to become more and more dependent?
08:05You need parental support to buy a house.
08:07Feel free to let me know in the comments section.
08:08I am Sun Sitao
08:09If you want to continue understanding
08:11US Real Estate
08:12Macroeconomic cycle
08:13Asset security
08:14And the deep structural changes taking place in the United States
08:16Welcome to subscribe to my channel
08:18See you next time!
