00:00California's total housing market value has dropped $106 billion in the last year.
00:07So what does that mean for potential home buyers?
00:13The new numbers from Zillow show the California market is now valued at nearly $11 trillion overall.
00:21While these numbers may not impact home prices and sales,
00:25it can be a way to look at the impact on the overall economy.
00:29I think real estate is a huge driver of our economy and we are going to start seeing the effect of this beyond the housing market, right?
00:41Every transaction generates over 20 industries as far as like escrow, title, movers, lenders.
00:52Each one of those industries is compromised when you see this amount of volume taken out of the economy.
00:59Even with that drop, housing affordability in the state is low, with just 15% of Californians able to buy a median-priced home.
01:09The average home price is now more than $761,000.
01:15Affordability is an issue all over the country.
01:17I mean, it's definitely an issue in California, but I don't think there's a metropolitan area in the country where,
01:22you know, no matter where you live, especially first-time buyers don't feel that the market is, you know, very unaffordable and that homes are too expensive.
01:34I think that we've hit an affordability crisis.
01:39It's just not attainable for buyers.
01:42The average income in California does not support the price of housing.
01:48And sellers are disincentivized to sell.
01:52Part of the reason they're disincentivized is because many currently have low interest rates.
01:58Another is the taxes on capital gains for housing sales hasn't changed since 1997.
02:05It's ridiculous that it's still at 1997 levels.
02:11And, you know, you would think our current president, being, you know, a real estate guy,
02:17would want to do something like that, but unfortunately it hasn't happened yet.
02:22It's all made first-time homebuyers hesitant to enter the market.
02:26This is not the market to even try to buy in.
02:31It just doesn't make sense.
02:34I would wait.
02:36And that's what we're seeing.
02:37That's what they're doing.
02:38They're waiting until it makes sense.
02:42I bought my first home when I was 22 in San Diego on, you know, just an average income.
02:49That is not an option.
02:52And there's no point in people going broke to be a homeowner.
02:56For Straight Arrow News, I'm Cara Rucker.
02:58For more unbiased, fact-driven news, download the Straight Arrow News mobile app today or go to san.com.
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