California has no single "best" investment market. It has several kinds of markets, and each one pays you in a different way. Coastal Orange County has produced the biggest long-term price gains. The Inland Empire and the Central Valley cost much less to enter. The Sacramento region is growing faster than the rest of the state while prices are still below their 2022 peaks.
This guide compares 16 California cities on home values, 1-, 5-, and 10-year appreciation, and population growth, using data through September 2026. It's the big-picture view for investors deciding where to put money. For a landlord's view of renter demand and rent rules, read best places to buy rental property in California. For cap rates and cash-on-cash math by city, read rental ROI cities in California.
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Quick Guide
- Strongest long-term appreciation: Newport Beach (+129.8% over 10 years), San Bernardino (+118.6%), Irvine (+104.1%), and Santa Ana (+99.5%), according to Zillow typical home values.
- At record highs in September 2026: Newport Beach, Laguna Beach, Santa Ana, and Anaheim.
- Still below their 2022 peaks: Elk Grove (−9.4%), Sacramento (−9.0%), and Roseville (−6.0%). These are also the fastest-growing cities on our list.
- Lowest entry prices: Fresno and Bakersfield, with typical values near $385,000.
- Financing matters: The 30-year fixed rate averaged 7.32% on October 22, 2026, its first stretch above 7% since January 2025.
California Markets Compared (September 2026)
Home values and appreciation come from the Zillow Home Value Index for September 2026, via Zillow Research. Population change covers January 1, 2025 to January 1, 2026, from the California Department of Finance E-1 estimates. Over that year, California's population fell 0.1%.
| City | Typical home value | 1-yr change | 5-yr change | 10-yr change | Population change |
|---|---|---|---|---|---|
| Newport Beach | $3,710,827 | +10.1% | +55.9% | +129.8% | −0.9% |
| Laguna Beach | $3,043,251 | +6.8% | +33.5% | +99.2% | −0.5% |
| Irvine | $1,481,490 | −1.9% | +53.9% | +104.1% | 0.0% |
| Mission Viejo | $1,201,393 | +2.9% | +38.4% | +95.6% | −0.9% |
| Santa Ana | $858,641 | +3.7% | +30.3% | +99.5% | 0.0% |
| Anaheim | $941,684 | +3.1% | +27.9% | +85.8% | −0.1% |
| San Diego | $980,490 | +0.1% | +21.1% | +79.9% | +0.7% |
| Los Angeles | $927,891 | −0.5% | +7.9% | +73.2% | −0.9% |
| Riverside | $641,514 | +0.9% | +17.5% | +81.9% | +0.2% |
| San Bernardino | $492,859 | +2.3% | +27.4% | +118.6% | −0.5% |
| Moreno Valley | $549,871 | +0.8% | +18.7% | +91.9% | +0.3% |
| Roseville | $643,854 | +0.8% | +5.6% | +58.4% | +2.7% |
| Elk Grove | $624,643 | −1.6% | +4.4% | +66.9% | +2.1% |
| Sacramento | $470,552 | −0.6% | +2.1% | +64.0% | +1.3% |
| Fresno | $384,885 | +0.6% | +17.1% | +87.3% | +0.1% |
| Bakersfield | $385,686 | 0.0% | +22.1% | +78.9% | +0.4% |
Zillow's index estimates a typical home value. It isn't a median sale price, so it won't match Redfin or MLS medians exactly. Use it to compare cities over time.
Where to Invest, by Market Type
Coastal Orange County: Newport Beach, Laguna Beach, Irvine, Mission Viejo
These cities produced the strongest long-term gains on our list. Newport Beach's typical value rose 129.8% in 10 years and 10.1% in the past year alone. Irvine's rose 53.9% in five years. Land is scarce, demand from high earners is steady, and new supply is limited.
The trade-off is income. Rents cover only a small share of the price, so these are equity plays, not cash-flow plays. Irvine is cooling slightly: Redfin's median sale price was $1,449,310 for the three months ending September 2026, down 6.5% from a year earlier, with homes taking 61 days to sell. For a long-term holder, a softer year in a top-tier market can be an entry point. See our Irvine city guide for neighborhood detail.
Central Orange County: Santa Ana and Anaheim
Santa Ana and Anaheim both hit record typical values in September 2026. Santa Ana is up 99.5% over 10 years, nearly matching Irvine, at well under two-thirds of Irvine's price. Both cities offer better rent-to-price ratios than coastal OC and sit close to the county's job centers.
One caution: Santa Ana has its own rent stabilization ordinance, which caps annual increases at 3% or 80% of CPI, whichever is lower. The current cap is 2.87% through August 31, 2027 (City of Santa Ana). Factor that into any rental plan.
Los Angeles and San Diego
The two big metros are heading in different directions. San Diego's typical value rose 21.1% over five years. Redfin shows a median sale price of $979,034 for the three months ending September 2026, up 3.4%, with homes selling in 28 days. The city also gained population.
Los Angeles has been flat by comparison. It rose just 7.9% over five years and sits 4.3% below its December 2024 high. Redfin reports a median of about $1.0M, down 1.7%, with 56 days on market. LA also lost 0.9% of its population. Investors who buy in LA now are getting a softer market. They also face the city's rent stabilization rules on older buildings, covered in our rental guide.
Inland Empire: Riverside, San Bernardino, Moreno Valley
The Inland Empire combines mid-range prices with long-term appreciation that has kept pace with the coast. San Bernardino's 118.6% 10-year gain is the second-highest on our list, behind only Newport Beach. Moreno Valley rose 91.9% and Riverside 81.9%. Typical values run about $490,000 to $640,000. That's well below Orange County prices, and within commuting range of OC and LA jobs.
Sacramento Region: Roseville, Elk Grove, Sacramento
This is California's growth story. Roseville gained 2.7% in population and Elk Grove 2.1% in the year to January 2026, while the state as a whole shrank 0.1%. Prices haven't kept up. Elk Grove's typical value is 9.4% below its June 2022 peak, and Sacramento's is 9.0% below its July 2022 peak. Redfin shows Sacramento's median sale price at $508,258, up 3.3% over the three months ending September 2026, with homes selling in 25 days. Growing population plus prices below the old peak is the setup many appreciation investors look for.
Central Valley: Fresno and Bakersfield
Fresno and Bakersfield have the lowest typical values on our list, at about $385,000. They also have some of the best rent-to-price ratios in California. Long-term appreciation has been solid: +87.3% over 10 years in Fresno and +78.9% in Bakersfield. Population growth is slow, so treat these as income-first markets with appreciation as a bonus.
The Late-2026 Backdrop
Mortgage rates are the biggest change this fall. Freddie Mac's 30-year fixed average hit a 2026 low of 5.98% on February 26. Since then it has climbed to 7.32% for the week of October 22, 2026. Higher rates cut buyer demand, which can mean more room to negotiate. They also make leveraged cash flow harder, especially in high-price coastal cities.
Price trends are mixed rather than falling. Of the 16 cities in our table, 11 were up year over year in September 2026, Bakersfield was flat, and four were down. Four cities (Newport Beach, Laguna Beach, Santa Ana, Anaheim) set new highs. The weakest markets were Irvine (−1.9%), Elk Grove (−1.6%), Sacramento (−0.6%), and Los Angeles (−0.5%).
How to Pick Your Market
- Long-term equity, high budget: Newport Beach, Irvine, Mission Viejo. Expect little or no cash flow. Hold for 10 years or more.
- Appreciation at a lower entry price: Santa Ana, Anaheim, and the Inland Empire. These offer better rent coverage than the coast, with long-term gains close behind it.
- Growth at a discount: Sacramento, Elk Grove, Roseville. Population is rising while prices are below their peaks.
- Income first: Fresno and Bakersfield. Our ROI breakdown shows the full math.
- Comparing states: If you're weighing California against Texas, our California vs. Texas ROI comparison covers taxes, rent rules, and yields side by side.
What to check in any market
- Population and job trends over at least three years, not one.
- Where prices stand relative to their prior peak.
- Local rent rules and any city fees for rental registration or transfers.
- Your carrying cost: the mortgage, Prop 13 property tax on your purchase price, insurance, and HOA dues.
- Your exit. Who buys this property from you in 5 to 10 years?
Mistakes to Avoid
- Chasing last year's winner. One strong year says little. Check the 5- and 10-year record.
- Assuming a famous city means profits. Los Angeles grew far more slowly over five years than Santa Ana, Anaheim, or San Bernardino.
- Ignoring local rules. Rent caps and just-cause eviction rules change your income, so read them before you make an offer.
- Underwriting at the old mortgage rate. Run your numbers at today's rate, and treat a future refinance as a bonus, not the plan.
- Buying without local eyes. You don't need to live in the city, but you need someone who knows its blocks, schools, and comps.
Key Takeaways
- For the strongest long-term price growth, coastal and central Orange County lead. Newport Beach, Irvine, Santa Ana, and Laguna Beach are all up about 100% or more over 10 years.
- San Bernardino's 118.6% 10-year gain shows that inland markets can match the coast on appreciation.
- The Sacramento region combines California's fastest population growth with prices still 6% to 9% below their 2022 peaks.
- Fresno and Bakersfield offer the lowest entry prices and the best rent coverage.
- With rates above 7%, pick your market for its long-term fundamentals, and underwrite the financing at today's rate.
FAQs
Is California real estate still a good investment in 2026?
For long-term investors, the record is strong. Every city in our table gained at least 58% in typical value over the past 10 years. The challenge in late 2026 is cash flow, because mortgage rates are above 7%. Choose a market that fits your goal and run the numbers at today's rate.
Where are California home prices rising fastest?
Among the cities we track, Newport Beach (+10.1%), Laguna Beach (+6.8%), Santa Ana (+3.7%), and Anaheim (+3.1%) had the biggest one-year gains in typical value through September 2026.
Which California cities are below their peak prices?
Elk Grove (−9.4% from June 2022), Sacramento (−9.0% from July 2022), and Roseville (−6.0% from June 2022) were furthest below their peaks in September 2026. Los Angeles (−4.3%) and San Diego (−4.2%) were also below their 2024 highs.
Is it better to invest in Orange County or the Inland Empire?
Orange County has stronger demand and the biggest coastal gains, but low rental yields. The Inland Empire costs much less, offers better rent coverage, and has matched much of OC's 10-year appreciation. Many investors hold both.
How much money do I need to invest in California real estate?
Typical values range from about $385,000 in Fresno and Bakersfield to more than $3.7 million in Newport Beach. Investment loans usually require a larger down payment than owner-occupied loans. Get pre-approved for the specific loan type first, so you know your real budget.
Plan Your Next Investment With Ali
Ali Shariat is a Realtor (DRE #02115442) and a licensed loan officer with Loan Factory (NMLS #1969265), based in Irvine. He works with investors across Orange County, Los Angeles, and San Diego. Contact Ali or call (949) 818-1000 to compare markets and financing for your goals.
