What You Should Know Before Buying a Home in California
Last Updated: September 29, 2022

What You Should Know Before Buying a Home in California

Are you looking to buy a home in California? Read this article to learn what you should know about California before buying a home.

Aside from the beautiful weather all year round, the golden state has everything. It has great cities, beautiful beaches, mountains, deserts, forests, national parks, lakes, and many cities to select from.

California Is Expensive

One of the first things you should know before buying a home in California is that it will be an expensive home. For example, the median home price in San Diego county is $832,900.

The median listing price in other counties:

  • Orange County, CA: $1.1M
  • Los Angeles, CA: $1M
  • Kern County, CA: $375K
  • Placer County, CA: $700K
  • Alameda County, CA: $999K

As you can see, the prices vary from county to county, so although it’s more expensive in some areas, there is still a way to buy in California. You have to get lucky to find some bargains here in California; if you find a cheaper home here than expected, you probably got lucky, or it’s a total fixer-upper. You still get a great lifestyle, fantastic weather, many career opportunities, great hiking trails, vineyards, and world-famous national parks. What more can you ask for in California?

California Houses Are Old

Some desirable California counties, such as San Diego County, have many old homes. For example, homes in San Diego county were built in 1939. When you are getting an older home, it means that they will not be in top condition, and you will likely have to replace some things. On top of that, many older homes have old piping that needs to be replaced and most likely comes with asbestos. Removing asbestos can be expensive.

So, if you are looking into buying an older home, it is best to ask questions about what has been updated so you can budget any needed upgrades. On the positive side of things, buying an older home may have an amazing backyard with lots of trees. The architecture may be something you love and are willing to pay for.

California has Earthquakes

California is prone to earthquakes. The 800-mile-long San Andreas Fault runs from the San Bernardino Mountains to the Mendocino coast. According to USGS, Southern California has about 10,000 earthquakes each year. Although the magnitude of the earthquakes is not more than 4.0, you still have to consider it when buying a home in California. You also have to know that most people know about earthquakes, but when we live here in California, we don’t pay much attention to small earthquakes.

One way to protect your home from an earthquake in California is to get earthquake insurance, and of course, if there is an earthquake, remember to Drop, Cover, and Hold on.

California Is a Hot Market

In the last two years ( 2020,2021), some realtors were getting forty offers for one property. That’s a lot of requests to compete with when you want to buy in California. Although it will no longer be a seller’s market in 2022, there is still not enough inventory for people who want to buy.

What can you do? If you are looking for a particular area to buy, most likely, you will have to wait for more homes to be on the market, but one strategy you can use is to be prepared to pay a little more for the home and work with a realtor that knows the market well in the city you want to buy. Another way to prepare for a home in California is to get a mortgage approval first.

If you get a mortgage approval, you can move fast and make an offer right when a home you like goes on the market.

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Property Taxes Aren’t Too Bad

California property taxes aren’t too high unless you’re living in New Jersey, where property taxes are at 2.48 percent. California property taxes are at 1 percent of a property’s assessed value. The reason for a much lower property tax bill is Proposition 13, which caps California Property taxes at 1 percent of a home’s assessed value at the time of purchase.

California is one of the top states with lower property taxes which is great because it helps when you’re paying a higher tag for a property.

According to the Board of Equalization (BOE), Real Property in California is defined as the following:

  • Improvements: Defined as all buildings, structures, fixtures, and fences erected on or affixed to the land, and all fruit, nut bearing, ornamental trees, and vines, not growing naturally, and not exempt from taxation, except date palms under eight years old.
  • The possessions of, claim to, ownership of, or right to the possession of the land.
  • All mines, minerals, and quarries in the land, all standing timber, whether or not belonging to the owner of the land, and all pertinent rights and privileges.

You should know that there are property tax exemptions for qualifying individuals, such as senior citizens, School Tax Relief participants, veterans, and individuals with disabilities.

So, if you think you can qualify, talk to your loan officer while applying for a mortgage loan.

California Has Mello-Roos

If you have never heard of Mello-Roos, another name for special assessments (or taxes) levied by counties. The purpose of Mello-roos is to pay for a community infrastructure within a Community Facility District (CFD). So, if you are buying a home in a CFD location, know that you will be paying taxes based on the home’s square footage and frontage areas of businesses.

The good news is that Mello-Roos is not to exceed 2 percent per year.

If you are buying a home in California, ask your realtor if the location is subject to special assessments. They should know this information and should be informing you.

No Real Estate Attorney in California Needed

When you’re buying a house in California, you are not required to hire a real estate attorney, but if you have questions about the transaction, perhaps it is a good idea to have some legal advice. In California, an escrow, title company, settlement agent, or real estate agent will handle your closing.

California Has Water Shortage

It seems that California has been dealing with water shortages for a while. The main reasons for drought are rising heat, depletion of groundwater supplies, and water shortages in the Colorado River. For example, from 2012-2016, we experienced a five-year drought where even the freeways had signs reminding Californians to save on water.

  • Rising heat: Elevating high temperatures cause extreme drought conditions.
  • Depletion of water supplies: Depending on groundwater clearly shows unsustainability. Groundwater can potentially run out.
  • Colorado River: The heat conditions have caused the Colorado River to shiver, making us question how we deal with hot drought and what we can do to conserve water.

Keep in mind that California uses extreme measures to get water from all possible sources. The state also has a water shortage contingency plan and constantly monitors the water shortage and the drought conditions.

California Has Many Places to Live In

When selecting where to live in California, there are plenty of cities. According to an article published in usnews.com, here are the top 10 cities mentioned in their study to consider moving to:

  1. San Jose, CA
  2. San Francisco, CA
  3. San Diego, CA
  4. Sacramento, CA
  5. Santa Barbara, CA
  6. Los Angeles, CA
  7. Santa Rosa, CA
  8. Fresno, CA
  9. Vallejo & Fairfield, CA
  10. Salinas, CA

If you are looking to buy in California and want a cheaper place to buy, according to the website Budget Travel Buff, here are the top 10 cheapest places to live in California.

  1. Oxnard, CA
  2. Rancho Cucamonga, CA
  3. Bakersfield, CA
  4. Clearlake, CA
  5. Oceanside, CA
  6. Sacramento, CA
  7. San Diego, CA
  8. Slab City, CA
  9. Long Beach, CA
  10. Fresno, CA

Bottom Line

California is a great place to live, but it can be expensive in some more desirable cities. However, don’t let that stop you from looking for a home in the golden state. Instead, consider your needs and wants and ensure you know how much you can afford before buying a home.

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