California's property tax structure is governed by Proposition 13, enacted in 1978. Under Prop 13, a home's assessed base value is established at the time of purchase and capped at a 1.0% statewide rate, plus voter-approved local school and municipal bonds (typically bringing total effective rates to 1.15%–1.30%). Furthermore, annual assessment increases are legally restricted to a maximum of 2% per year until the property changes ownership, protecting long-term homeowners from runaway market inflation. Because median single-family home prices in the Bay Area, Los Angeles, and San Diego frequently exceed $900,000, buyers often utilize high-cost conforming loan limits (up to $1,149,825) or private Jumbo loans requiring 10%–20% down payments and 6 to 12 months of post-closing liquid reserves. Additionally, hazard insurance premiums vary drastically across California depending on CalFire wildfire severity zones and CEA earthquake coverage options.