Eight out of the 10 least affordable cities for homebuyers in the United States are located in California, according to a recent report, with the state’s median sales price of a home over 30 percent higher compared to the early pandemic period.
The eight Californian cities include Santa Barbara, Berkeley, Santa Monica, Glendale, Burbank, Los Angeles, Pasadena, and San Francisco, according to a May 23 report by WalletHub. Boulder, Colorado, and New York City took the remaining two spots in the list of 10 least affordable cities.
On the other end of the price spectrum, among the top 10 most affordable cities, three were in Michigan, two in Ohio, and one each in Alabama, Pennsylvania, Arizona, Illinois, and Florida.
According to data from real estate brokerage Redfin, the median sale price of homes in California was $765,900 in April.
Though this is down by 8.6 percent compared to April 2022, it is still 33 percent up compared to the home price of $574,200 in April 2020, the initial period of the COVID-19 pandemic. In April 2023, the median sales price of a home in the United States overall was $407,857.
Redfin data also shows that 25 percent of homebuyers searched to move to a different metro area between February and April this year.
The top five places homebuyers searched to move from were California, New York, District of Columbia, Massachusetts, and Indiana. The top states where homebuyers searched to move to were Florida, Texas, Arizona, South Carolina, and Tennessee.
James Refalo, a professor of business and economics at California State University, pointed to crime rates being a factor encouraging people to relocate.
“Crime rates have risen in some urban areas. San Francisco, Seattle, Portland, New York, LA, and Chicago, have all become poster children for this problem. That will probably drive buyers to other communities, particularly with families,” he told WalletHub.
“California has become a wholesale disaster and is not an example to follow. If you are fostering economic development, you should be planning thirty to sixty years out for the potential population growth. Keep that in mind.”
The report compared 300 U.S. cities across 10 metrics, including housing affordability, cost of living, and home price affordability.
California’s Housing Crisis
Not only is housing in California the most expensive, but the state also has a shortfall of around 3.5 million homes—a problem being blamed on government policies.
In an interview with EpochTV’s “California Insider” in December, Larry Salzman, a litigator with the Pacific Legal Foundation, partially blamed the state’s environmental laws for the tight housing situation.
California’s property regulations for building and zoning homes, as well as the California Environmental Quality Act (CEQA), create a situation where environmental factors play a key role in determining how land is used.
“[CEQA] was originally conceived as something to sort of preserve wilderness in an environmentally sensitive habitat. … But overwhelmingly, 90 plus percent of [CEQA-related] lawsuits are actually attacking building permits in infill development areas,” he said.
Consequently, CEQA is being used by some residents to prevent new construction in their neighborhoods.
An August 2020 report by Holland & Knight, a Florida-based land-use and environmental law firm, found that “the failure of California’s housing policies has made the nation’s largest, most densely populated urban area and wealthiest state, the poorest (by far) in the nation.”
“Notwithstanding the state’s deep blue politics, its communities of color, as well as children, are far more likely to be poor than other population segments.”
It’s not just housing prices putting pressure on Californian citizens; the overall cost of living is also high in the state. “The cost of living in the Bay Area is astronomical,” Luke Wang, owner of Vast Aquacaping—an aquarium consulting service in Northern California—told The Epoch Times last month. “It’s insane.”
According to the Missouri Economic Research and Information Center, California ranks fourth in terms of the highest cost of living in the United States. California was found to have the second highest transportation costs, fifth highest housing costs, and sixth highest electricity prices.
