“How expensive?” tracks measurements of California’s totally unaffordable housing market.
The pain: California is home to 15 of the 25 most expensive metropolitan areas in the country.
The source: My trusty spreadsheet assessed the annual report on ‘price parity’ from the US Bureau of Economic Analysiswhich gives us a snapshot of the relative differences in the cost of living among 384 metropolitan areas across the country in 2023 – including 26 from California. This inflation calculation is based on both price and spending fluctuations, and is part of the Federal Reserve’s favorite inflation gauge: the “PCE” (Personal Consumption Expenditure).
The squeeze
This isn’t a surprise, but rather a stark reminder of the state’s biggest economic challenge: the cost of living here.
The most expensive metro in the country? San Francisco, where it costs 18.2% more than the typical US subway.
Why? Of course they are housing costs. San Franciscans pay double the national standard, while utilities are 58% higher.
The second most expensive metro area in the US is the region that includes Los Angeles and Orange counties, with a cost of living 15.5% higher than what an average American pays. Housing is 73% more expensive and utilities are 35% higher.
Pressure points
Consider the other thirteen California metros that rank high on the scorecard of the most expensive places to live: a collection of major coastal metros.
Ventura County: Costs 13.5% more than the typical U.S. expense, and ranks third nationwide. Housing costs are 78% above US costs, while utilities are 30% more expensive.
Santa Barbara: Also No. 3 at 13.5% above normal, with housing 76% above the US and utilities 28% more expensive.
Salinas: 13% higher (No. 5) – residential 67% higher than US, utilities 35% higher.
San Jose: 12.9% higher (No. 7) – residential 113% higher than US, utilities 35% higher.
Santa Cruz: 12.6% higher (No. 8) – residential 75% higher than US, utilities 34% higher.
Napa: 11.8% higher (No. 10) – residential 62% higher than US, utilities 39% higher.
San Diego: 11.5% higher (No. 13) – residential 86% higher than US, utilities 54% higher.
San Luis Obispo: 10.8% higher (No. 14) – residential 50% higher than US, utilities 27% higher.
Santa Rosa: 10.1% higher (No. 16) – residential 47% higher than US, utilities 36% higher.
Vallejo: 9.2% higher (No. 18) – residential 36% higher than US, utilities 36% higher.
Sacramento: 8.9% higher (No. 19) – residential 34% higher than US, utilities 33% higher.
Domestic Empire: 7.9% higher (No. 21) – residential 32% higher than US, utilities 57% higher.
Stockton: 7.4% higher (No. 23) – residential 20% higher than US, utilities 39% higher.
Painful reality
The cheapest place to live in California still has the 89th highest cost of living in the country, out of 384 metros tracked.
Living in Hanford, a Central Valley farming community, is 1.6% cheaper than the national standard. By this calculation, housing costs are 31% below those of the average US metro. But energy prices are 39% higher than the national standard.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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Originally published: December 26, 2024 at 8:08 AM PST