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The Best Places to Live in California

Many of us have dreamed of moving to California and enjoying what the Golden State has to offer. But not all California destinations are equally desirable. SmartAsset crunched the numbers to find the best places to live in California. Let’s take a closer look.

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Study Specifics

A great place to live can be hard to define, but SmartAsset took a crack at it. To find the best places to live in California, we pulled Census Bureau data on seven factors: median monthly housing costs, percent of people living below the poverty line, median home value, median household income, unemployment rate, percent of population that lacks health insurance and the Gini coefficient (a measure of income inequality).

Key Findings

  • The greater Bay Area is a hot spot for cities on our list. Seven of the cities on our top 10 are all within close range of each other. San Ramon, Dublin, Hercules, Fremont and Pleasanton are on the east side of the Bay, while Foster City is on the west side. Cupertino is southwest of the Bay.
  • Company towns are thriving in California. Five of the cities on our list, San Ramon, Folsom, Cupertino, Foster City and Pleasanton, are “company towns.” Several companies, including Chevron and 24-Hour Fitness, have headquarters in San Ramon. Intel, the largest private employer in the Sacramento area, calls Folsom home. Apple has its headquarters in Cupertino and Visa is headquartered in Foster City. Safeway, Inc. and Blackhawk Network both call Pleasanton home. All five towns attract high earners and enjoy low unemployment rates.

The Best Places to Live in California

1. San Ramon, California

Located 34 miles east of San Francisco, beautiful San Ramon tops our list of the best places to live in California. San Ramon is the site of corporate headquarters for Chevron and 24-Hour Fitness, as well as being the West Coast headquarters of AT&T, Inc and the Global Software Center for G.E.

Because it scored well across all our metrics, San Ramon tops our list. The city has a median home value of $754,700. The median income in San Ramon is $128,916 and just 4.2% of the population lives under the poverty line. The unemployment rate is low (5.1%), as you might expect in a city with so many large employers.

2.   Ladera Ranch, California

The well-heeled residents of Ladera Ranch, California enjoy a high standard of living. The planned community in Orange County hasn’t been around long, but it’s already one of the best places to live in the state.

Residents of Ladera Ranch enjoy a median home value of $691,300. Median monthly housing costs are high at $3,099, however the median income of $134,435 puts high housing costs within reach. The unemployment rate in Ladera Ranch is just 3.6%.

3. Dublin, California

Dublin, California is an East Bay suburb whose residents are well positioned to pursue a range of job options. The city is 35 miles east of San Francisco, 23 miles east of Oakland and 31 miles north of San Jose. No wonder the city’s unemployment rate is so low.

The median home value in Dublin, California is $632,300, and the city’s residents pay median monthly housing costs of $2,363. The median income is $118,773 and the unemployment rate is 4.5%.

4. Foster City, California

Foster City is the second planned city on our top 10 list. Visa and many other companies have their headquarters in California. The largest employer in Foster City is Gilead Sciences, which tells you something about the education level of the local workforce.

The median home value in Foster City is a whopping $897,200. Still, median monthly housing costs come in at $2,433, which isn’t astronomical (at least by the standard of New York, SmartAsset’s hometown). Moreover, Foster City residents earn a median income of $123,039, which helps put expensive housing in reach. Just 2.8% of Foster City residents lack health insurance coverage. That’s the lowest percentage of uninsured residents of any city in our top ten.

5. (tie) Folsom, California

Have you heard the song “Folsom Prison Blues?” If so, you may be surprised to learn that the site of a notorious prison is now a thriving city. Tied for fifth on our list, Folsom is home to the headquarters of Intel.

The median home value in Folsom is a high $409,400. However, median monthly housing costs come in at $1,795 – downright affordable compared to some of the other cities on our list. The median income in Folsom is $100,978 and the unemployment rate is 6.4%.

5. (tie) Pleasanton, California 

With a name like Pleasanton it’s got to be good, right? The suburb, 25 miles east of Oakland, benefits from the hot job market in the San Francisco Bay Area. It’s a wealthy city that’s home to the headquarters of Safeway, Inc. and Blackhawk Network. No wonder it tied for fifth place in our study.

Pleasanton residents earn a median income of $124,759 and their homes have a median value of $772,500. Median monthly housing costs come in at $2,453 and the unemployment rate is 5.5%.

7. Cupertino, California

Cupertino is, famously, the site of Apple’s headquarters. Housing prices in Cupertino are high, but the well-compensated population tends to take that in stride.

You may be familiar with the name Cupertino, but we’re guessing you don’t know quite how good the city’s residents have it. The median home value in Cupertino is the highest in our top 10 (but not the highest in California), at $1,140,200. Median monthly housing costs total $2,577 and just 3.7% of residents live below the poverty line. The median income in Cupertino is $141,953.

8. Rancho Palos Verdes, California

Rancho Palos Verdes takes us further south in our list, to a city within Los Angeles County. Wealthy residents treasure their sea views in Rancho Palos Verdes. There’s even a Trump National Golf Club in the city.

The median home value in Rancho Palos Verdes? $968,200. Median monthly housing costs are $2,202 and the median income in the city is $118,780. The unemployment rate in Rancho Palos Verdes is 4.7%.

9. Fremont, California

Located in Alameda County, Fremont is another East Bay city that benefits from its proximity to San Francisco. Moreover, Fremont isn’t far from Silicon Valley. No wonder the city boasts thriving residents.

The median income in Fremont is $105,355 and the median home value in the city is $648,800. Median monthly housing costs are (relatively) low, however, at $1,973. The city is thriving, in other words, but it’s worth noting that the unemployment rate (6.4%) is higher than that of most cities on our top 10.

10. Hercules, California

Finally, let’s take a look at Hercules, California, which is 10 miles north of Berkeley. The diverse city started out as a company town for the Hercules Powder Company. Now, however, the city no longer has an industrial reputation. Nature-lovers will appreciate the many parks and trails accessible in Hercules.

The $395,800 median home value in Hercules is the lowest in our top 10. It’s still well above the national average, however. Median monthly housing costs in Hercules are $2,068. The median income? $101,018. Hercules’ unemployment rate is 5.3%.

The Best Places to Live in California

Data and Methodology

Data for our study on the best places to live in California all came from the Census Bureau’s 2015 5-Year American Community Survey. We used a population filter to include only cities with at least 20,000 residents. We finished, therefore, with 345 California cities in our study. The 345 cities were ranked using the following metrics:

  • Gini coefficient. This factor is a measure of income inequality. The Gini coefficient is a number that’s always between 0 and 1, where a score of 0 means a population has achieved perfect equality and a score of 1 represents perfect inequality between rich and poor. Because many wealthy communities are plagued by inequality, we included the Gini coefficient to weed out cities with the worst gap between rich and poor.
  • Median home value. Including median home value as a factor serves as a measure for wealth in a community. Because for most Americans the family home is the largest family asset, median home value is an excellent proxy for family prosperity. Moreover, it’s a metric that attests to the desirability of a given city’s real estate.
  • Median monthly housing costs. Whether you rent or buy you want your monthly housing costs to be affordable to you. Because housing costs are an important proxy for cost of living we included the metric in our study and considered lower housing costs to be better for the purposes of our ranking.
  • Percent below poverty line. Because even wealthy cities have struggling residents, for our study, we wanted to find cities where few residents were living below the poverty line. The Census Bureau metric we included in our study shows the percent of city residents living below the poverty line.
  • Median household income. Money isn’t everything, but it certainly helps a household to have a high income or two. We looked at median income for the cities in our study to capture places where residents were earning high salaries.
  • Unemployment rate. Because some California cities are still struggling with double-digit unemployment rates, even in the wake of the country’s recovery from the Great Recession, we included unemployment as a factor. In our study, we wanted only cities with low unemployment rates to rank among the best places to live in California.
  • Percent without health insurance. Because the future of the U.S. health insurance marketplace is up in the air, there’s more recognition of the key role that health insurance coverage plays in household financial security and well-being. That’s why we included the percent of people lacking health insurance coverage as a metric in our study of the best places to live in California.

We ranked each city on each of the seven factors and then calculated the average rank for each city across all factors. Each factor received equal weight in our analysis, however some factors were considered to be positive (a higher number is better) and some negative. Finally, we gave each city a score based on its average rank and then re-ranked the 345 cities to get our top 10 and top 25 lists.

All of the above metrics received equal weight in our ranking. However, they were not all treated the same when it came to deciding whether a higher number would help a city rank higher. Because these metrics all measure factors we wouldn’t want to be high in a city, the Gini coefficient, percent uninsured, median monthly housing costs, unemployment rate and percent living below the poverty line were ranked as follows: a lower number helped a city rank higher in our study. On the other hand, for median home value and median income a higher number helped a city rank higher.

Questions about our study? Contact us at press@smartasset.com.

Photo credit: ©iStock.com/thinkreaction

Amelia Josephson Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.
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