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California Has the Most Expensive Homes Based on Price Per Square Foot in the U.S.

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In a time of inflation and limited housing stock, buying a house anywhere in the U.S. can seem prohibitive. One state, however, has multiple cities in which the median price per square foot is three or even four times the national average: California.

According to a study from Homebay, California is the most expensive state in the country by price per square foot. California’s lack of bang for buyers’ buck is consistent across the state, with zip codes and metro areas in both the southern and northern parts of the state among the most expensive home-buying areas nationally.

The full study found that the price per square foot – a measurement of how much home a buyer receives relative to its overall cost – has skyrocketed across the U.S. in the past decade. Recent events have tamed housing costs in some parts of the country, but the study indicates that California remains out of reach for many buyers.

Six of the 10 Most Expensive Cities Are in California

When it comes to the most expensive cities in terms of price per square foot, no state approaches California.

That’s because California has a mind-boggling six out of the top 10 most expensive cities based on price per square foot in the U.S., including the top four – San Jose, San Francisco, Los Angeles, and San Diego.

California’s cost per square foot challenges exist beyond the I-5 corridor. Even inland cities like Sacramento and Riverside have an unusually high median price per square foot, ranking ninth and tenth nationally.

Perhaps most frustrating for would-be California home buyers is that the cost per square foot in many of the California cities is substantially higher than not just the national median, but also other highly expensive American cities. For example, the median price per square foot in San Jose, CA is $845. That’s about four times the national average of $232, and close to double New York City which at $490 price per square foot has the highest non-California median price in the U.S.

California buyers also aren’t shelling out for unusually large homes. In fact, of the California cities ranked in the 10 most expensive based on price per square foot, only Sacramento homes have a median square footage (2,012) above the national median of 1,944. In every other California city on the list, median square footage is lower than the national average.

The Most Expensive Zip Codes in the Country Are in California

California’s standing as pricey per square foot isn’t only due to high across-the-board home prices in its metro areas. Living in luxury is inordinately expensive in California, too, as six of the 10 most expensive zip codes in the entire country are in California – including the two most expensive.

Indeed, the most expensive zip code in the country is 94956, located in Point Reyes Station, CA. The median price per square foot? $20,677 – more than ten times the national median, and a gobsmacking $17,205 higher than the next closest zip code, which is also in the San Francisco Bay Area.

In fact, save for a zip code in Newport Beach, CA, near Los Angeles, five of the six California zip codes on the top ten list are in the San Francisco Bay Area – suggesting that home buyers looking for a low price per square foot should simply avoid northern California.

There Are Inexpensive Cities Based on Price Per Square Foot – But They Are Far From California

Buying a home with a median price per square foot under the national average is possible – but that won’t happen in California, or even anywhere else on the west coast.

In fact, of the 10 least expensive cities based on price per square foot, not a single one is in the Pacific Time Zone or the Mountain Time Zone. All are in the Central Time Zone or Eastern Time Zone, with the majority – Cleveland, Pittsburgh, Indianapolis, Buffalo, St. Louis, Louisville, and Detroit – located in the so-called “Rust Belt” of post-industrial midwestern cities.

The difference in price per square foot between this region and California is staggering. The most inexpensive city, Cleveland, has a median price of $133 per square foot, which is about eight times less than San Jose.
The reduced price per square foot in these cities compared to cities in California is largely attributable to lower home prices. For example, median home prices in Cleveland and Pittsburgh in 2023 are $248,480 and $240,450, respectively. Compare that to the median 2023 home prices in San Jose and San Francisco, which are $1,498,000 and $1,172,000. Effectively, the cost of a down payment in California cities is the total cost of a house in other parts of the country, meaning a cross-country move might be what it takes for some buyers to snag a home.

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