California is a dream destination, known for its beaches, sunshine, and booming economy. Between Silicon Valley’s tech hubs, the glitz and glamor of Los Angeles, and the laid-back lifestyle of San Diego, the Golden State has something for everyone.
However, high housing costs, taxes, and living expenses often give newcomers pause. For most, the decision to move hinges on balancing lifestyle perks with the state’s high cost of living. Here’s a breakdown of California’s housing market, daily expenses, and regional differences, so you can decide if it’s the right place for you.
Why Do People Love Living in California?
People are drawn to California not just for its beaches and major cities, but also for its quieter, lesser-known towns. In Ojai, locals enjoy pink sunsets and citrus groves, while Murphys, a Gold Rush town, offers neighbourly wine tastings on Main Street. These small towns provide a contrast to the state’s fast-paced urban centers, offering a balance of opportunity and a sense of community.
California’s landscapes add another layer of appeal. Where else can you surf at Huntington Beach in the morning and ski in Tahoe by evening? While Yosemite draws the crowds, less-visited spots like Lassen Volcanic National Park offer geothermal wonders like boiling springs and bubbling mud pots. With quirky traditions like Gilroy’s Garlic Festival, everyday life in California feels anything but ordinary.
What Is the Cost of Living in California?
The cost of living in California is 56% higher than the US average. However, it varies widely depending on the region. Coastal metros and tech hubs can be significantly pricier than inland cities or smaller towns.
- Housing: Housing remains the biggest cost driver in California. The average home price now sits at $822,700, 60% higher than the US average. Renting isn’t much easier on the wallet: a typical home lease averages $3,000 per month, nearly double the national rate.
- Utilities: Monthly utility bills in California average $500, which is about 25% above the national average. This figure includes electricity, water, trash, and internet costs that run higher due to the state’s varied climate and energy demands.
- Food & Groceries: Food expenses add another factor in California’s high cost of living. A typical monthly grocery bill comes to about $145, roughly 15% above the US average. Urban hubs like Los Angeles and San Francisco can be even pricier, thanks to demand and transport costs.
- Healthcare: Healthcare costs are also higher here, averaging $500 per month, 15% above the national average. Higher medical service rates and insurance premiums contribute to the added expense.
- Transportation: Getting around in California isn’t cheap. Transportation expenses average nearly $80 monthly, about 15% higher than the national norm, driven largely by some of the highest gas prices in the nation and steep auto insurance premiums.
- Miscellaneous: Other day-to-day costs, from entertainment to personal care, average around $550 per month, nearly 20% more than the national average.
California Housing in 2025: A Tale of Two Markets
California’s housing market in 2025 is a study in contrasts. The statewide median price for a single-family home sits at $822,700, a fraction higher than last year, yet the picture shifts drastically depending on where you look. Along the coast, counties such as San Mateo and Santa Clara can hit $2 million, reflecting the pull of tech hubs and limited inventory. Further south, Orange County buyers face median prices above $1.4 million, while Santa Barbara is just over the million-dollar mark.
Drive inland, and the story changes. In the Inland Empire, prices average $589,020, significantly lower than the Bay Area highs. Homes also linger on the market longer, with the average sale taking 28 days, nearly 40% slower than last year. This divide between coastal and inland markets reflects just how varied California’s housing landscape is. For buyers, the state is neither wholly unaffordable nor broadly accessible. It depends entirely on the zip code, lifestyle preference, and how far you’re willing to commute.
Career, Lifestyle, and Top Places to Call Home in California
California isn’t just about sunshine and beaches, it’s a land of opportunity, with a mix of industries and living environments. Whether you’re drawn to high-paying tech roles, the entertainment industry, healthcare, or agriculture, there’s a region here that aligns with your career goals and lifestyle. And when you’re ready, you can find your dream home on Houzeo, America’s best home buying website.
San Francisco Bay Area: Tech, Finance, and Innovation
Silicon Valley in the Bay Area is a global center for technology, finance, and innovation. Big names like Apple, Google, and Salesforce bring in engineers, designers, and business professionals. San Francisco blends city life with stunning natural scenery: Golden Gate Park, the Embarcadero, and vibrant neighborhoods like the Mission District and Pacific Heights. Families often settle in suburbs like Palo Alto, Menlo Park, or Walnut Creek for their quality schools, parks, and quieter pace of life. However, homes here come with premium price tags.
Los Angeles: Entertainment, Business, and Diversity
Los Angeles thrives on creativity and commerce. Media, entertainment, international trade, and tech industries are concentrated here. Urban neighborhoods like Santa Monica, West Hollywood, and Downtown offer proximity to offices, restaurants, nightlife, and cultural events. Families often favour suburban areas like Pasadena, Burbank, or Calabasas, which have spacious homes, excellent schools, and community amenities, while still being reasonably close to job centers.
San Diego: Coastal Jobs with a Relaxed Lifestyle
San Diego is a professional hub for biotechnology, defense, and tourism, but it also has a laid-back coastal charm. Young professionals often gravitate toward downtown neighborhoods like Gaslamp Quarter or Little Italy, while families prefer Carmel Valley, La Jolla, or Rancho Bernardo for their modern homes, good schools, and safe streets. Residents can enjoy beaches, parks, and a more relaxed pace than the Bay Area or LA.
Inland and Northern California: Affordability Meets Growth
Sacramento, Fresno, Riverside, and Stockton offer more affordable housing, larger homes, and family-friendly suburbs, while supporting careers in government, healthcare and logistics. These areas appeal to buyers seeking space and lower costs, without giving up proximity to California’s larger job markets.
6 Tips for Homebuyers in California
- Plan for High Property Taxes and Insurance: Although California’s property tax rate averages 0.73% due to Proposition 13, high home values result in substantial annual taxes. Earthquake insurance is strongly recommended in many areas, especially along fault lines in the Bay Area and Southern California, which add to overall homeownership costs.
- Consider Inland and Suburban Alternatives: Cities like Sacramento, Fresno, and Riverside are significantly more affordable than coastal hubs. Suburbs here have larger lots, modern communities, and good schools, making them ideal for families looking for value without compromising on lifestyle.
- Explore New Developments and Incentives: New builds in California’s inland and suburban areas often come with upgraded finishes, energy-efficient features, and closing cost assistance. This gives buyers more value for their money in a competitive market.
- Leverage First-Time Homebuyer Programs: California has buyer-friendly programs such as CalHFA loans, down payment assistance, and mortgage credit certificates. Counties like Los Angeles, San Diego, and Orange provide localized grants, which can significantly reduce upfront costs for first-time buyers.
- Research Lifestyle Fit Before Buying: Apart from housing affordability, consider commute times, local amenities, school districts, and neighborhood safety. Coastal areas offer proximity to beaches and outdoor recreation, while inland areas provide space and quieter communities. Knowing your lifestyle priorities is key to choosing a home that suits you best.
- Run a Full Cost Model: Before you bid, use California’s mortgage calculator to account for property taxes, insurance, HOA, and utilities. This will help you visualize the financial impact of your monthly payments.
Is California a Good Place to Live?
California promises unparalleled career opportunities, vibrant cultural experiences, and a lifestyle that spans from sunny beaches to tech-driven cities. But with its high home prices, taxes, and living costs, it’s not for the faint of heart. While those chasing career growth and the California dream may find the benefits worth the price, families and first-time buyers may discover better value in the state’s inland cities and suburbs.
In the end, if you’re drawn to California’s opportunities, climate, and diversity—and are prepared to handle the costs—the Golden State could be the perfect place to call home.
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