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Liz Farmer: California — not for everyone, but essential for some

Liz Farmer, Rate.com on

Published in Business News

Its coastal cities are pricey, global hubs of talent and innovation

The state of California seems to attract apocalyptic news coverage and the way things are going, it's unlikely to let up. You may have heard about an exodus of people fleeing lengthy commutes through gridlocked traffic, unaffordable housing, high taxes, wildfires, electricity outages and, always, the massive earthquake that will soon cause havoc.

And then you may hear from an employer in California offering you the most interesting job at, by far, the highest pay you've ever considered.

What's a sane and reasonable person to do? Some homework, obviously, and in the article that follows, I rummage around public and private data sets to help you understand the truth of California's challenges and rewards.

--The big picture: To overgeneralize, the state's coastal cities are nearly essential locations for some ambitious people in the tech and entertainment industries, where concentrations of talent come together to generate enormous innovation and wealth. Your Silicon Valley startup failed? If you're a programmer, chances are you can walk across the street and get another job tomorrow.

For many of us in less glamorous lines of work, though, attaining income to cover the high cost of living in those cities is very difficult, if not impossible. Inland, away from the Pacific Ocean, California is much more like most of the rest of the country: not so expensive, not so economically dynamic.

 

Also, it's a big state, with 40 million people, the fifth-largest economy in the world, and 1,040 miles north to south. So, while writing about the whole of it may make for a better story, any serious consideration of living there -- and buying a house, say -- ought to focus more locally.

--Home prices: Yes, the median San Francisco home price tops $1.5 million, but 90 miles away, the median home price in Sacramento, a city of 500,000 and the state's capital, is about $385,000. You can check out home prices everywhere here.

Price isn't the only housing problem. There's an acute shortage of homes in coastal cities. That forces many workers into long commutes. And tens of thousands of less fortunate Californians are homeless. The NIMBY (not in my backyard) sentiment among existing homeowners keeps new housing from being built in many areas. In fact, the overwhelming majority of neighborhoods in California's major cities are zoned for single-family homes, which keeps more affordable options like condos or apartments from being built. So, that dynamic, along with a strong job market and rising incomes, pushes home prices up.

--Spending power: You have a pretty good idea how far a dollar goes where you currently live, but before considering a move you should check out purchasing power in cities across the country. This Tax Foundation webpage does nicely. Taking a new job that reduces your purchasing power probably isn't your goal.

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