California peaked years ago dude.
California is an extremely beautiful place... But it's also the most over-regulated place to build imaginable. The state itself doesn't make it easy by requiring lots of green (expensive) building codes, labor is more expensive due to the high costs of living (because in part of high taxes and regulations), building code adoptions are too strict in many cases, gas is 30% more expensive than the US average (Highest gas taxes), and a plethora of other issues. But just wait until you dig into some of the local fees... Whoa mama.
If you wanted to build a new house in Sacramento in 2021, the fees alone (permits, plan reviews, lots and lot of mitigation fees..) average $95,000 per home. Think about that, you are paying through the nose for a lot, crazy high labor, higher material costs due to stricter standards, and on top of all that, you get hit with $95,000 in fees by the city itself. That's insane...
List of all the fees to build in Sacramento
And a simple math explanation for why California's GDP is so great... Let's compare it to Texas, the second largest state and its closest rival in terms of size.
California 2022 Q3 GDP per capita $93,130
Texas 2022 Q3 GDP per capita $79,995
California 2022 Cost of living index - 146.79
Texas 2022 Cost of living index - 95.65
California 2022 Average Hourly Earnings - 37.44
Texas 2022 Average Hourly Earnings - 29.96
California 2022 Median House Price - $843,000
Texas 2022 Median House Price - $389,000
California 2022 Median Gas Price Per Gallon - $5.28
Texas 2022 Median Gas Price Per Gallon - $3.47
California's GDP is inflated because $1 in the entire US requires $1.47 in California to have the same purchasing power... They have to pay their employees more, they sell their houses for 3X the national average, they charge more for gas... ETC. The GDP is inflated because of the cost of living is so 17ing high. California doesn't produce more product than texas, it just spends more to produce less.
Case and point: Based on permits, in 2022 California had $99 billion worth of residential real estate contributions to its GDP. Texas had $102 billion. Of course that was only 118,000 units in CA vs 265,000 in TX.
If we are going to look at the GDP of an individual state in USD, we should look at the value of the USD in that state. No different than comparing the GDP of 2 countries in that regard.