Forget The 2,500 Square Foot. Three-Bedroom For $1.2M, Says Kevin O'Leary. That's The Going Rate For A Trailer Now In California

Core Insights - The housing market in states like California is experiencing a significant drop in affordability, with a reported decrease of about 40% [1][2] - Rising costs of mortgages, insurance, and taxes are contributing to the housing market stagnation in high-risk states [2] - Despite the challenges, there are still investment opportunities in real estate, with modest price growth expected over the next five years [4][5] Affordability Issues - Affordability has decreased sharply, meaning buyers can now afford 40% less square footage for the same price [1] - The combination of high mortgage costs, insurance, and taxes is exacerbating the affordability crisis [2] Market Stagnation - The housing market has come to a halt in parts of California, Texas, and Florida due to rising costs and insurance burdens [2] - High-risk states face unique challenges with insurance related to natural disasters, making it difficult for homeowners to find coverage [2] Investment Opportunities - Despite the grim outlook for affordability, real estate remains an area of interest for investors, particularly in multifamily housing and converted commercial spaces [4][5] - Experts predict home prices will appreciate by about 13% to 14% by 2028, with annual growth rates of 1% to 2% [4]