About 45% of California households are comprised of renters, but calling the state a renters' paradise is a stretch, considering many of its residents simply cannot afford homeownership, Local Market Monitor said in a new report.

Local Market Monitor, a real estate data firm that reports on local and national trends, believes high home prices keep California renters from homeownership alternatives, feeding the state's reputation as a nonownership society.

Making matters worse is California's glut of vacant properties due to the recent boom-bust cycle in real estate that left many foreclosures and underwater borrowers in its wake. Smaller inland markets took a substantial hit with units sitting vacant after speculators built up more affordable markets, leaving behind a glut of housing.

California also lost 400,000 manufacturing jobs in the past 10 years and another 400,000 construction positions, hurting income levels throughout the state.

Some of these employment numbers dissuade certain investors.

"Unemployment is very high in much of the state, limiting the immediate opportunities for investors in rental properties," wrote Ingo Winzer with Local Market Monitor.

"On the other hand, job growth has been strong in some markets, which will lead to stronger rental demand in the next couple of years. The best job growth in the past year has been in Stockton, Redding, Santa Cruz, San Jose, Salinas, Vallejo, San Francisco and Bakersfield."