Choosing where to buy a home depends on numerous factors, ranging from housing prices and living costs to the weather and job market. But when it comes to where most Americans actually settle down, there’s one factor that far outweighs the others — proximity to your hometown.
More than two-thirds (68%) of Americans end up living in or near where they grew up, according to a survey from North American Moving Services.
One thing that stat reveals is that the majority of Americans rarely, if ever, think about which states to buy a home in — mostly because they simply stay in the state where they were raised. For everyone else, though, choosing the right state to buy a home in can have a major impact on their finances and quality of life.
Although California is far and away the most populous state in the country, there are plenty of reasons not to buy a home there. Certain other states also have red flags when it comes to house hunting.
Here are four reasons not to buy a home in California and nine other states.
Prices Are Much Higher Than Average
This is a particular problem in California, where the median sale price was $748,833 as of July 2024, according to Zillow. That’s more than double the national median of $365,333. Other states with much higher-than-average prices include Hawaii ($736,167), Massachusetts ($620,333) and Washington ($589,667).
Heated Competition
One factor that drives home prices up is when several buyers are bidding on it. According to Zillow, more than half (50.7%) of homes in California sold for more than the original list price during the 2024 second quarter — a sign of multiple offers. Nationally, the percentage that sold for above the list price was only 34.7%.
High Cost Of Living
Another reason you might want to shy away from buying a home in some states is because it’s expensive to live there. California certainly qualifies because it ranks as one of the priciest states in the country, according to a GOBankingRates study of U.S. government data. Here are the five most expensive states as of 2022:
5. Vermont
- Cost-of-living index: 115.6
- Annual cost-of-living expenditures: $84,350
4. Alaska
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- Cost-of-living index: 125.3
- Annual cost-of-living expenditures: $91,428
3. California
- Cost-of-living index: 139.7
- Annual cost-of-living expenditures: $101,935
2. Massachusetts
- Cost-of-living index: 143.1
- Annual cost-of-living expenditures: $104,416
1. Hawaii
- Cost-of-living index: 181.5
- Annual cost-of-living expenditures: $132,435
High Property Taxes
Moving to a state with high property tax rates can add many thousands of dollars to your annual housing bill. Here are the five states with the highest property tax rates, according to a separate GBR study that analyzed 2022 Tax Foundation data.
5. Connecticut
- Average effective property tax: 1.76%
- Average annual property tax paid: $6,571
4. Vermont
- Average effective property tax: 1.82%
- Average annual property tax paid: $6,666
3. New Hampshire
- Average effective property tax: 1.96%
- Average annual property tax paid: $8,698
2. Illinois
- Average effective property tax: 2.05%
- Average annual property tax paid: $5,374
1. New Jersey
- Average effective property tax: 2.21%
- Average annual property tax paid: $10,409
