California Consumers: More Spending, Higher Costs

One of the main reasons for the disparity is the difference between California and the nation when it comes to the cost of housing – and this is readily apparent in the new numbers released by the BEA. The state has been in the midst of a housing shortage for years now, due in large part to regulatory hurdles such as the California Environmental Quality Act (CEQA) and other legislation that constrains construction. The lack of supply pushes up prices and forces residents to commit more of their disposable income to housing. According to the real estate research firm DataQuick, the median price for an existing home in California was $388,000 in December 2014, nearly double the national median home price of $209,500, as reported by the National Association of Realtors.