Relocate America (www.relocateamerica.com ) has just released their list of the top cities in America in which to live. They are: 1. Naperville, IL; 2. Cary, NC; 3. Boulder, CO; 4. Ithaca, NY; 5. Charlottesville, VA; 6. Ann Arbor, MI; 7. New York, NY; 8. Columbia, MO; 9. State College, PA; VA 10. Bend, OR.

It is interesting that not a single one is from California. In fact, there are only 4 Californian cities (Benicia, CA; Redding, CA; Roseville, CA; San Francisco, CA; Yorba Linda, CA)  in the top 100! What is going on here? Have we lost our “edge?”

Well, part of the answer may be in the selection process itself. First, a community must be nominated by a current or a past resident or “other individuals familiar with the community benefits”.  Then Relocate-America reviews the nominations and rates cities according to certain perceived benefits such as people and neighbors, the schools, low crime rates, the beauty of the area, activities such as museums, theaters and sports, economic health, employment opportunities and affordable housing…

Oh, Oh!! That might be the kicker!! Affordability in this area ranges between 15 and 20%, depending on which statistics you use. Starter homes in Palo Alto and Menlo Park begin at around $1,000,000 and Mountain View prices are not far behind. It is extremely difficult for first time buyers to come up with a down payment substantial enough to purchase a home in this area or to earn enough to afford the enormous monthly payments. People who have bought with the leverage provided by adjustable mortgages have to be aware that interest rates are rising! The potential for difficulties down the road is everywhere.

In the meantime there is no end in sight for this crazy real estate market. Sellers, if you are even thinking of selling, this would be a good time to do it. Buyers, find a good real estate agent to help you, but don’t get discouraged. I have buyer clients who decided last year to step back and wait for the ‘bubble’ to burst. So far it hasn’t, and it may never happen. In the meantime they are getting farther and farther behind. If they had bought last year they would already have 15-20% equity in their homes due to appreciation. The moral of this story is: If you want a place to live, go for it, but go for it wisely.