How odd. I'm at WWDC, but watchOS 2 think I'm in the South Atlantic Ocean!
My iOS9 iPhone 6 is still convinced I'm in San Francisco though...
Location problem in watchOS 2?
I've seen posts suggesting it is a bug and it results from the inability to get gps data.
If you go outside it should work.
But the watch doesn't have a GPS itself, and the iPhone's location is already correct...
I find that using the Map app on watch seems to help. It forces watch to get GPS from phone, then location things begin to work.
I'm on Beta 2 on both Watch & Phone. Phone shows I'm home on dry land, Weather app on Watch says I'm swimming in the Atlantic. I run Maps on Watch & it says my location is home, but doesn't help correct the Weather app on Watch. It also prevents Sunrise/Senset complication from working. Going outside wearing Watch doesn't help.
I had the same experience up until beta4. Now the weather app is spot on. Have you tried turning the location services for maps off and on?