There's a certain cost to build a house. It's not like the houses themselves are more in CA (well, maybe a little), it's the land. For example, my house is appraised around $300k but the land is appraised at $1.2 million.
My 4 bedroom house in Oakland had a replacement cost/value of about $400k. That seemed high but not unreasonable. Then the Santa Rosa fire burned down 1000 homes and insurers realized that construction costs in California are insane (especially when you are trying to build a thousand in a year). Replacement cost jumped to $750k in one year. The land used to be worth quite a good fraction of the property, and then it wasn't.
My home’s replacement cost is way higher than what the insurer appraised it as, but asking for a higher appraisal counts as warning bells in their eyes (are they planning on burning down their home?).
That may be what your used house is worth in an appraisal but if you wanted to build it new, it would cost significantly more I imagine. It depends a lot on finishes and framing complexity of course (number of windows, roof, etc).
A lot of people I know in Colorado found this out when their homes burned down. They had the structure insured for like $500,000 and found out that rebuilding their home that was built 20 years ago would cost around $1,000,000.
A friend recently had a multi story addition put on his house, and of course additions always cost more because there's some amount of demolition and working on an existing site, so the new footings have to be underpinned, etc. It's also a large kitchen and the existing kitchen space had to be demo'd and rebuilt into a new, basic room. The upstairs connected to a hallways but there was some work. Anyways, the cost, all in was over $500k. Even if he didn't use Marvin windows, Wold appliances, nice cabinetry, etc it would have been like $400k. And yes you can go lower. But don't be fooled. A lot of the cheaper construction you see is not only made with awful materials and lazy/inexperienced tradesmen, but is also track housing or similar no modifications allowed type things.
