It wouldn't be surprising if he went to Bayern Munich because I remember he has a history there as a football player. I don't think Xabi, who did wonders in the Bayer Leverkusen story, would go directly to Bayern so as not to disrespect them. Maybe it could be an option for Liverpool. Liverpool could be better with him in the Premier League.
It's actually very possible to move to Bayern Munich but then I don't think Xabi would want to move there just like that, he's very likely to move away from Germany probably to England than he would be in Germany and Coach Munich a d I think personally it wouldn't be a very good move if he's actually moving to Munich in the bundesliga as that wouldn't be healthy for his career both in Germany and generally.
Although england too still doesn't appear like a perfect deal for me because I feel these are two different leagues with different levels of competition so it's very possible that he will be facing different levels of challenge across these two leagues which I don't think same tactical approach would help him achieve the same results and he hasn't really played much against england teams as a coach with Leverkusen so it will be better he stays back one more season in Germany at Leverkusen and get to improve his form and get a much better reputations around Germany then he can move subsequent season but I think now is looking too early.
He's just getting into the coaching career and he needs more of development of his career and not him already moving around different league already because he was able to achieve a certain level of success already at the early stage of his career but then he knows which will be best for him but I really do doubt if he's going to be able to get same results he got in the German league in the English league immediately.