11 Best Places to Buy a House in California in 2023

California is the most populous state in the United States and the third-largest by area. Being the home to many Fortune 500 companies, Golden State enjoys a booming economy and attracts thousands of people from across the globe to live the life of their dreams.

If you are a U.S. newcomer or a foreign investor who wishes to live in California, buy a new home, or expand your investment portfolio by purchasing rental properties in California, scroll through this comprehensive list of the 11 best places to buy a house in California now!

11 Best Places to Buy a House in California

1. San Diego

San Diego is the eighth-largest city in the US and second largest in California, nestled on the Pacific Ocean coast near the Mexican border. With a population of 1.4 million, home values in Carlsbad Metro surged by 11.1% last year and are projected to rise by 0.4% from Sept 2022 to Sept 2023. 

With 53% renter-occupied and 47% owner-occupied households, it’s an ideal place for both homeowners and investors. 

Median Home Prices: $935,000 

Average Home price: $937,453 

Average Rent: $ 2,917 

Why it stands out: Known for its mild climate, beautiful beaches, and laid-back lifestyle, San Diego has long been considered one of Southern California’s most sought-after places to live, work, and play. This Pacific Coast city combines the urban vibes of art and culture alongside fun physical activities like surfing or boating. 

2. Irvine:

Irvine is family-friendly, safe, and education-focused town in California. It hosts the University of California and major companies like Samsung, Honda, and Verizon Wireless, providing diverse job prospects. 

In the last twelve months, appreciation was 18.78%, projected to rise by 14.53% in the next year above the national average. With 55% renter-occupied and 45% owner-occupied households, it’s a compelling choice for investing in rental properties. 

Median Home Price: $1,400,000 

Average Home Price: $1,289,328 

Average Rent: $3,142 

Why it stands out: Irvine remains a great place to live and invest in real estate. With a strong job market, high quality of life rating, and reasonable rental rates, Irvine offers a lot of potential for those looking to rent or invest in the rental market. 

3. Palo Alto

Palo Alto, in California’s Bay Area, houses Stanford University and ranks among the top five priciest U.S. cities. It’s the fifth most expensive housing market, following San Francisco, Honolulu, and Boston. For substantial real estate investments, consider Palo Alto.

Median Home Value: $3,100,000  

Average Home Price: $3,157,559 

Average Rent: $3,704 

Why it stands out: As one of the principal cities of Silicon Valley, Palo Alto is home to the headquarters of multiple tech companies, including HP, Space Systems/Loral, VMware, and PARC.  the tax breaks you get, as well as the potential for price appreciation over time. 

4. Manhattan Beach:

Manhattan Beach, CA, a coastal city in Los Angeles County, features upscale real estate and is known as “The Pearl of the South Bay.” With a steady rise in real estate value, a 4.9% appreciation rate from last year, and its allure for vacation rentals, it offers a promising investment choice. 

Median Home Price: $3,175,000 

Average Home Price: $2,974,687 

Average Rent: $1400 

Why it stands out: Manhattan Beach is considered a safe community, and just about any neighborhood in the town is close to excellent schools and offers the safety and security you want for your children. Manhattan is known as the global capital of commerce. It is renowned for its iconic attractions, towering skyscrapers, and unparalleled cultural offerings. 

5. Palm Spring

Palm Springs is the perfect place for you if you want to escape the hustle and bustle of everyday life. This desert oasis is located in southern California, about two hours east of Los Angeles. Palm Springs is a popular destination for retirees and great for families and couples. 

The real estate market in Palm Springs is booming, and many different types of properties are available for purchase. There are luxury homes, condo complexes, and even vacation rentals. No matter what your budget, you’ll be able to find a property to suit your needs in Palm Springs.  

Median Home Price: $600,000 

Average Home Price: $647,948 

Average Rent: $1,888 

Why it stands out: Palm Springs’ iconic mid century-modern architecture attracts design lovers, while famous names like Walt Disney and Frank Sinatra once reveled in the desert oasis.

6. Lake Forest

Lake Forest, CA, nestled in the Saddleback Valley, is a prosperous small town celebrated for its expansive parks and pristine neighborhoods. Abundant outdoor activities like hiking, biking, and golfing enrich the lifestyle. With a 14.6% housing market increase last year and anticipated momentum, it presents a prime investment opportunity. 

Median Home Price:  $1,162,500 

Average Home Price: $1,038,760 

Average Rent: $2,380 

Why it stands out: Lake Forest, a suburb of Irvine, has a population of 85,516 and is situated in Orange County. It is highly regarded as one of the top places to reside in California. Residents enjoy a dense suburban atmosphere, with the majority of them being homeowners.

7. Redlands:

Redlands, CA, nestled in Southern California’s historic Inland Empire, boasts a rich past as a citrus hub turned bustling city. The real estate market is steadily gaining momentum, with a 6.9% increase over the past year. With 42% of homes renter-occupied and a growing trend, investors find it opportune to secure rental investment properties for promising long-term gains. 

Median Home Value: $600,000  

Average Home price: $603,589 

Average Rent: $2171 

Why it stands out: The cost of living and housing prices in Redlands may be relatively lower compared to San Jose, making it a more budget-friendly option. Redlands is within proximity to popular destinations like Los Angeles and Palm Springs, providing easy access to various recreational opportunities.

8. Sacramento

If you’re looking to buy a house in California, Sacramento, the state capital, hosts a thriving start-up and tech scene. As an affordable housing option, it’s real estate market grew significantly, up 5.4% last year. With a balanced mix of renter-occupied and owner-occupied homes at 50% each, Sacramento presents a promising investment opportunity. 

Median Home Value: $475,000 

Average Home Price: $466,942 

Average Rent: $1851 

Why it stands out: Sacramento holds the titles of the “Farm-to-Fork” capital, the “City of Trees,” and a significant hotspot from the California gold rush. This city is celebrated for its historical allure, delightful local and Californian cuisine, as well as its abundant green landscapes.

9. Santa Barbara

Nestled between the Santa Ynez Mountains and the Pacific Ocean, Santa Barbara is a stunning coastal town offering a mix of rural and urban living. With excellent schools and ample open spaces, it’s an ideal place for families. 

In Santa Barbara, 59% of households are renters, while 41% are owners. The real estate market in Santa Barbara saw a 16.4% spike last year, with expectations of further growth. Timely property investments offer promising returns. 

Median Home Value: $1,910,000 

Average Home Price: $1,664,258 

Average Rent: $2,550 

Why it stands out: The cost of living in Santa Barbara requires 30.69% of the area’s median household income, making it the fifth-most expensive place to live out of the 150 metro areas on the list.

10. Orange County

In Southern California, Orange County offers Pacific Ocean beauty and Santa Ana Mountain splendor. With beaches for water sports and hiking, plus Fortune 500 companies attracting a constant inflow of residents, there’s always something to do. 

With 41% renter-occupied and 59% owner-occupied households, real estate investment here is wise. Median home prices rose 11.8% in the past year, with momentum expected to grow. It’s the right time to buy an investment property here. 

Median Home Price: $1,059,000 

Average Home Price: $1,034,917 

Average Rent: $2,524 

Why it stands out: Orange County, California, ranks as the 6th most populous county in the United States and is renowned for being the residence of legendary tourist destinations like Disneyland, California Adventures, Knott’s Berry Farm, and a plethora of picturesque beaches.

11. San Francisco

San Francisco, a famed California city, boasts mild climate, hills, and the iconic Golden Gate Bridge. A top tourist spot, it houses tech startups and Fortune 500 firms. 

San Francisco’s real estate is fiercely competitive and promising. 62% are renter-occupied households. Over a decade, it surged 100.3%, poised for more growth. An ideal spot for long-term high-value investments. 

Median Home Price: $1,405,000 

Average Home Price: $1,285,602 

Average Rent: $3,393 

Why it stands out: San Jose’s cast of high-paying employers make this a place for young professionals who want to leave their mark on the tech scene. The median home price and average salary are both high, to be sure, but it’s not all about money: This city’s diversity score is impressive as well. It’s home to culturally diverse neighborhoods including Little Italy, Little Portugal, Little Saigon and Japan town.

Now that you have an idea of the best places to buy a house in California, It will be wise to shop for the right real estate agents to buy the property that meets your requirements and investment goals. Reach out to HomeAbroad to get in touch with the best real estate agents.

If you are still contemplating and feeling indecisive, brushing through the advantages of buying a house in California can help you make up your mind. Here are a few benefits of buying a home in California.

Advantages of Buying a Home in California

1. The real estate market is booming.

According to the NAR report, the California housing market continues to flourish as foreigners amounted to 11% of the total home buyers in the year 2021-22. California real estate continues to grow with a 3.8% growth percentage and is expected to rise by 4.3% in 2022-23. Currently, California is the 2nd most preferred destination to buy a home in the USA.

2. It has a strong job market

California is the leading state in the US in terms of job opportunities as it is home to many prominent businesses such as Google, Facebook, Apple, Amazon, etc. The unemployment rate in California is also pretty low( 4.6%). So, if you’re planning to move here for work, you won’t have any difficulty finding a job.

3. The climate is perfect

If you love sunny weather and mild winters, California is the place for you, as the average temperature here ranges from 60-80 degrees Fahrenheit.

4. It has great infrastructure

The state has a great infrastructure with an extensive network of highways and public transport, ensuring easy access to nearby and far-off places too.

5. There are endless recreational activities

From hiking and biking to surfing and skiing, California offers endless recreational outdoor activities that you can enjoy all year round.

6. The state has excellent schools

If you’re moving here with your family, you’ll be glad to know that California has some of the best schools in the country. In fact, 8 of the top 10 high schools in the US are located in California.

7. It’s a melting pot of cultures

One of the best things about California is that it’s a melting pot of cultures. As a result, you’ll find people from all walks of life here, making it a very diverse and inclusive place.

8. Rental Properties

Rental properties are in high demand. With the ever-increasing population and job opportunities, the demand for rental properties is also on the rise. So, if you’re looking to invest in rental property, California is a great place to do it.

9. Property Taxes are Reasonable

Compared to other states, the property taxes in California are very reasonable. California’s average effective property tax rate is 0.73%, lower than the national rate, which sits at 1.07%.

10. It’s a great place to retire

If you’re looking for a place to retire, California is a great option, as it has many retirement communities offering world-class amenities and facilities.

The list of advantages indicates that California is one of the best places to live, but what if you wish to buy a property for investment? Is California worth it, then? Let’s find out.

Is California Real Estate Really Worth It?

Despite being one of the most expensive states in the USA, investors vouch for California’s capability to generate handsome returns because:

1. Appreciation

• California Association of Realtors (CAR) predicts a 5.2% increase in home prices for 2023. 
• CAR’s report suggests a potential 23% decrease in housing affordability next year. 
• This situation creates opportunities for significant real estate investment appreciations in the coming years. 

2. Rental Returns

• Post-COVID-19, there’s a continuous influx of population, leading to high demand for rental properties in 2023. 
• As of August 2022, California rental rates have surged by 22.04%, indicating the strong demand for rental properties. 
• The increase in rental prices presents an opportunity for investors to achieve high returns on their long-term investments. 

3. Low Taxes and Proposition 13

• California offers some of the lowest property taxes in the US, with Proposition 13 capping it at 1% of the property’s total market value and limiting annual increases to 2%. 
• This tax advantage attracts investors from around the world, leading to potentially significant returns. 
• Statistics and reports support California as a highly promising real estate market for investment. 
• Considering the positive real estate appreciation in California, it’s worth considering the housing outlook before making a decision to invest. 

So is California worth it? Yes, it definitely is. All the statistics and reports indicate that California is one of the most promising real estate markets to invest your money in.

Now that you are confident about the real estate appreciation in California, let’s have a quick look at the housing outlook before you decide on taking the big plunge.

California Housing Outlook

• California housing market is on the rise after a rough patch during COVID-19. 
• Median home prices and rentals are increasing steadily. 
• Over the last decade, real estate has appreciated by 141.78% at an average annual rate of 9.23%. 
• Demand for rental properties in California is rising due to office and college reopening. 
• Renters currently occupy 45.9% of total home ownership. 
• Tourism is gaining momentum, with inbound travel spending increasing by 202% in 2022. 
• Expected tourism spending to reach $16.4 billion. 
• Tourism trends suggest a ripe market for investors to buy vacation homes and generate good returns. 

To learn more about California real-estate market, click here: How to Buy Property in California as a Foreigner.

Buy a House in California with HomeAbroad

Now you know the best place to buy a house in California, but still, you need to the right resources to buy the best property in California. A property that meets your personal, family, cultural, and investment requirements.

HomeAbroad hosts a vast network of CIPS agents and mortgage lenders who have the required expertise and industry knowledge to help you find and finance the best home in California.
Our lenders can provide you a mortgage with no US credit. So, if you are new in the US, your credit score can’t stop you from buying your house in California.

Conclusion

There are many great places to buy a house in California. However, before investing your hard-earned money, it is important to consider the growth of real estate in the city and the rental income you may generate from the investment. HomeAbroad agents are the best at guiding investors on which area and property is ideal for living and renting. The agents are trained in virtual home tours and online dealing, ensuring that your home-buying experience remains as joyful as your investment returns.

We will be happy to connect you with the best real estate agents for free!

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