California is home to many company headquarters, including the biggest tech companies like Google, Apple, Uber, and many others. House prices in California are much higher than the U.S. average. If you are thinking of starting your own business, you might want to start by opening a California LLC.
A median house price in California is estimated to be around $680,000, while the U..S median house price is only around $330,000. These prices in California were justified by the demand for housing of high-paying professionals. Nowadays, many jobs, especially in tech, are offered remotely, and some professionals choose to move away from expensive cities in search of more affordable living accommodations.
California Housing Market
Housing prices in California have seen significant growth in the past decade. On average, housing prices increased by 8.5% each year during the 2010s. During the same period, the US housing market has been appreciating by only 4.5%. As of 2020, the average single-family house price per square foot was around $315, while the price per square foot in the US was around $122. California’s housing market has been appreciating much more quickly than the US market partly because of the inflow of professionals working for large companies that established their operations in the state.
The pandemic has shown that many jobs, especially in the tech industry, can be done remotely. Many employees of large tech companies started to prefer working from home rather than commuting to their workplaces every day. This lack of need to be present in one place every day also opened an opportunity for the workers to move outside of expensive cities in the search of more affordable and higher quality accommodations.
Because of the existing high prices and outflow of professionals, California may see a decline in sales of houses and condominiums during the year 2022 due to the workers relocating to more affordable areas. Even though the sales are projected to be lower, the house prices are still expected to increase. The increase is approximated to be around 5.2%, which is lower than the average increase over the previous decade of 8.5%. The slower growth allows new homebuyers to acquire their property at a lower price than expected. On the other hand, economic recovery in the area due to decreasing covid cases may increase the production in the area. Due to the increase in production, the wealth of the households is likely to increase, which will drive the prices higher in the upcoming years.
Where Remote Workers Move
Remote workers who choose to move away from expensive areas need to first consider where their employer allows them to move and how it will affect their salary. Companies tend to restrict the places where remote workers can relocate because of the legal and tax implications associated with the relocation of employees. There are also costs associated with overseeing and managing employees who choose to move to the areas that lack the company’s operations in the area. In addition to that, the employers understand the financial benefit of relocating to a more affordable location, and some of them may try to take advantage of that by offering a lower salary that is based on the salaries offered in the relocation area.
If an employer is concerned about legal and tax implications of relocation of their employees, then the employer might still allow the relocation within California. In this case, 5 locations are well suited for remote workers because they provide affordable living, which includes housing prices, food prices, and entertainment.
1. North Tustin, Orange County
2. Jamul, San Diego County
3. Granite Bay, Placer County
4. Ben Lomond, Santa Cruz County
5. El Granada, San Mateo County
If an employer does not restrict the relocation of their employees to California, then the employees have much more flexibility in their choice. The most popular destination for remote workers after California is Texas. Texas is known for its affordable living, low taxes, and vibrant lifestyle. It is wise to estimate the cost of living in the area before choosing to relocate.
What to Consider Before Moving
There are a lot of considerations to be made before choosing to relocate to another city or state. The best place to relocate depends on the employer’s relocation policies, tax implications, the number of dependents, the type of lifestyle, and other personal preferences.
For example, a family with a child who leads a healthy lifestyle and likes to experience new cuisines may be more willing to relocate to Austin, Texas. Austin is known for its cultural diversity, music festivals, and food shops. Austinites are known for being family-oriented and leading a healthy lifestyle. In addition, Texas is one of the seven states that charge a 0% income tax rate.
On the other hand, a single professional who enjoys spending time with peers and living in a high-paced environment may be better off relocating somewhere within California. Some cities in California are very affordable and experience a strong inflow of professionals from all over the USA. California is the most popular destination for remote workers, and this trend is expected to continue over the year. This means that a single professional may find a lot of like-minded peers who share similar interests and pursue a similar lifestyle.