California is a beautiful place. The climate is perfect all year round and the scenery is breathtaking. But it can be very expensive to live in California, especially for people who were born here and live on a fixed income. In this blog post we will go over some of the reasons why is California so expensive to live in .
California is home to some of the most beautiful beaches in the world. From bustling San Diego to picturesque Santa Barbara, California has something for everyone. Whether you’re looking for a place to call your own or want to escape on an adventure into uncharted territory, this state offers everything from sandy shores and sun-soaked days to endless recreation opportunities and pristine mountain peaks.
The geography of California is vast and diverse. From the forests in Northern California, to beaches along Southern coastline. A a state of great natural beauty and all-out wealth. With famous landmarks suchlike The Hollywood Sign, Long Beach Boardwalk Surfing sunset at Huntington beach San Diego’s Embarcadero Pier.
More people live in California than anywhere else, with over 39 million residents across an area 423 969 km2 or 163 692 square miles making it the third most populated U.S., fourth largest economy by GDP.
What are the reasons why California is expensive to live in?
#1 Housing – Housing in California is expensive due to a variety of factors, including high demand and low supply, cost of land and labor and building permits. The median price for homes across the state currently sits at $800K which makes it more than double what you’ll find on average nationally ($350k).
California is notorious for its high-housing costs because of the demand and lack of supply. It’s hard to find housing that you can afford, especially in major cities like Los Angeles where there are lots of people competing for any number of available homes or apartments.
#2 Rent – Rent can be very expensive especially if you live in the city. A studio apartment in Los Angeles can cost $1700 per month which is equivalent to a mortgage payment on a home with land.
#3 Public Transportation – Public transportation is expensive. A monthly pass can cost $100 or more, and it’s harder to get around the city without a car than in other parts of the country. The cost of gas is also high, which means that even people who do have cars are paying more to get from point A to point B.
#4 Income – The median income in California is higher than the national average. But it’s not enough to offset cost of living increases, particularly for those on fixed incomes or who have a family to provide for.
#5 Purchasing power parity – Purchasing Power Parity (PPP) takes into account that what can buy you in one country may not go as far in another. Or the cost of living is higher and your money won’t stretch as far (e.g., rent).
#6 Taxation – California has a diverse taxation system that includes income, sales, vehicle, tobacco and alcohol taxes among others. It’s one of the highest taxed states in America with top marginal rates reaching 13 percent for income tax.
Taxes are much higher than other parts of the country (sales tax, income tax, etc.) which can cost citizens thousands of dollars. The real property tax in California is a very complex system, but it will be easy to understand once you know this: all properties are taxed annually and the rate depends on how much they’re worth at that point. Property taxes can go up 2% either per year or inflation (whatever’s lower), with Proposition 13 limiting total increases for any given county no more than 10%.
#7 Education – College is expensive in California and it’s becoming harder for families to pay tuition on a single income or limited savings. State funding has been falling and universities across the state have raised fees by as much as 20 percent.
#8 Healthcare costs – Healthcare is more expensive in California especially if you don’t have health insurance or your employer doesn’t provide it for free because many employers cover only a portion of premiums and employees end up paying the rest. There are also more uninsured people in California than any other state.
#9 Weather – The weather is great and the warm, sunny days can be a factor when thinking about moving to California but they’re not cheap! Electricity bills will likely be higher than if you lived elsewhere. And during the summer months between May and September expect high temperatures that could reach triple digits. The winter months are mild but the wet weather can cause flooding and landslides as well as other damage to your property.
#10 Crime – Due to its diversity, California is home to many illegal street gangs so it’s not always safe there whether you live in a city or out in the country with lower crime rates. Because of this, insurance premiums are higher than most other states which offsets some of the savings from living and working here (if you can get a job).
#11 High living expenses – Living expenses here are quite high, even with average incomes. The combination of high taxes and the need for multiple jobs to make ends meet means that most people are living paycheck-to-paycheck rather than saving enough money to buy a home or start their own business which has led many people to leave California in search of greener pastures elsewhere.
#12 Food – Food is also very expensive in California compared to other parts of the country, because food costs vary from region to region based on what grows best there and how far it has to travel before reaching local consumers.
Consider these factors in order to fully understand why California is so expensive to live in.
What are the benefits of living in California?
There are several benefits to residing in California. Here are a handful of examples:
- The entertainment and tourism industries are huge.
- There’s a wide variety of outdoor activities to enjoy such as hiking, biking, kayaking and so on because California is home to some amazing natural landmarks like Yosemite National Park (Yosemite Valley), Death Valley and the Mojave Desert as well as beaches along its coastline that can be enjoyed year-round.
- Career opportunities are abundant with technology, manufacturing and agriculture companies in the state employing thousands of residents across many different sectors.
- California’s economy is booming and unemployment rates are well below the national average.
- Californians tend to have a better quality of life compared to other states, especially in terms of work/life balance.
Despite the expensive cost of living in California, the state is a great place to live.
Tips for living in California
Here are a few tips for living in California:
- Take advantage of the lower housing prices in surrounding areas.
- You can save a lot on food by shopping at local farmers’ markets and buying from roadside stands.
- Go to open houses for homes that are affordable but may need work or renovations before you move in because even with these costs, it could be cheaper than renting an apartment there without having to pay a hefty deposit.
- Buy a car that’s less than five years old because there are plenty of used cars available for sale, even if you have bad credit or no money to put down as a down payment.
- Avoid getting into debt unless it can be paid back quickly and in full so get rid of your credit cards before moving to California.
- If you’re moving to California for the first time, consider renting until you get a feel of what living there is like.
- Be sure to compare different job opportunities before settling on one so that you don’t end up in an unfulfilling career path.
- When buying or selling property, work with real estate agents who are familiar with the area to get the best deals.
- If you’re considering opening a business, take note of all local and state laws that could affect your chances for success.
FAQs
How do I choose where to live in California?
Choosing where you want to live in California will greatly depend on your personal needs and preferences. Are you interested in living near the beach? Maybe you want to live somewhere that is close enough to a major city so it’s easy for commuting but far away enough where housing prices are lower than closer-in suburbs? There are many factors involved with choosing which place would be best suited for you based on what you’re looking for in a home.
What is the best place to live in California?
Considering the many benefits of living in California, there are several top-tier cities that should be considered for anyone looking to relocate. Some prime examples include San Francisco, Los Angeles and San Diego which are among the most popular places people choose when it comes time to settle down because they offer a wide variety of entertainment options, job opportunities as well as a good quality of life.
What are the cheapest places to live in California?
There are many cities where you can find cheaper housing prices compared to others around the state including Fresno, San Bernardino and Modesto which offer affordable real estate options but aren’t known for being tourist destinations often visited by out-of-state residents.
What is life like living in California?
Life can be difficult for Californians because they earn more than most other Americans but don’t necessarily end up with more disposable income. Californians have to work hard to make ends meet and then hope that they can keep a job long enough to afford the high costs of living there, considering that their state isn’t always hiring new employees.
Final Thought
The price of living in California is high because the cost of housing is so expensive. Home prices are likely to continue increasing due to a lack of available land and increased demand for homes near good schools, jobs, and public transportation. The cost of living in California is expensive and the weather isn’t always pleasant, but when you consider all that California has to offer, it’s worth exploring if this is a place for your family.
At the end of the day, housing is just one part of a bigger equation. If you enjoy living in California and can afford it then there are ways to bolster your savings by making sure that every other aspect of daily life doesn’t also take a toll on your wallet. We hope this article has been helpful for those who have an interest in moving out west or trying to figure out if they should leave all together.
Please consult a licensed real estate agent or appropriate professional
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