Overview
California is the most populous state in the US and home to some of the most expensive real estate markets in the country. The state offers diverse landscapes, from beaches to mountains to deserts, and a strong economy driven by technology, entertainment, and agriculture.
California Real Estate Market
California's real estate market is characterized by high prices, particularly in coastal areas like San Francisco, Los Angeles, and San Diego. While prices have moderated from their pandemic peaks, the state remains one of the least affordable in the nation. Strong demand, limited inventory, and strict building regulations continue to drive prices.
Property Taxes in California
California property taxes are governed by Proposition 13, which limits the tax rate to 1% of the assessed value (plus local bonds and assessments). Property is reassessed to market value only upon sale or new construction.
Average effective rate: 0.76%
Annual tax on median home: ~$5,966
First-Time Buyer Programs
CalHFA Programs: The California Housing Finance Agency offers several programs for first-time buyers:
- MyHome Assistance Program - Deferred-payment junior loan for down payment
- CalPLUS Conventional - Combined with ZIP program for closing costs
- CalHFA FHA - FHA loan with down payment assistance
Closing Costs in California
Typical closing costs in California range from 1-2% of the purchase price, lower than the national average due to lower transfer taxes in most counties.
Common costs include:
- Escrow fees: $500-$2,000
- Title insurance: 0.5-1% of purchase price
- Transfer tax: $1.10 per $1,000 (varies by county)
- Recording fees: $100-$200
Frequently Asked Questions
California can be a good place to buy if you have the budget, as the state offers diverse lifestyles, strong job markets, and excellent weather. However, high prices and property costs make it challenging for many buyers.
The average effective property tax rate in California is about 0.76%, one of the lower rates in the nation due to Proposition 13 protections.
Yes, CalHFA offers several programs including down payment assistance and below-market interest rates for first-time buyers who meet income requirements.