San Diego, CA has been named the most expensive city to live in the United States, according to a new report by U.S. News & World Report. The designation is based on an analysis of the cost of living, including housing, transportation, food and utilities, across 150 U.S. metro areas.
California dominated the top spots, with 7 cities in the state ranking in the top 10 most expensive. High costs of living have earned California the nickname “The Golden State”, but make day-to-day life difficult for many residents.
Soaring Home Prices Drive Up Costs
A key factor in the high cost of living is skyrocketing home prices. San Diego’s median home price of $950,000 far exceeds the national median of $428,700. With limited housing inventory, prices have been pushed up sharply.
Downtown high-rise condos and apartments also come with hundreds of dollars per month in homeowner association fees. These fees pay for amenities and maintenance, but add to the already high cost of housing.
“Living in San Diego is not particularly affordable,” the report stated. “San Diegans are willing to pay these elevated prices, though, often referring to the cost-of-living differences as the ‘sunshine tax,’ or the price of enjoying a year-round temperate climate.”
Transportation and Utilities Add Up
While housing accounts for the largest share of expenses, other costs are stretched in San Diego as well. At $6.42 per gallon, gas prices were among the highest in the nation as of October 2022. This makes commuting and getting around the city a strain on budgets.
Utilities like electricity and water carry premium price tags in San Diego. These essential services cost about 15% more compared to other Western cities.
California Dominates Priciest Cities List
The Golden State demonstrates its high cost of living by placing 7 metro areas in the top 10 most expensive cities. Los Angeles ranked 2nd, while smaller cities like Santa Barbara, San Jose and Sacramento also made the top 15.
New York City, the biggest U.S. city at over 8 million residents, came in 11th on the list. It remains expensive compared to most of the country, but has been surpassed by many California cities.
Honolulu, Miami, and Santa Rosa ranked 3rd, 4th, and 8th respectively. Securing a spot in the top 10 requires greater wealth, indicating obstacles for people of more modest means hoping to get by.
Affluent Job Market Attracts Residents
The high cost of living might make San Diego seem undesirable, but the city offers advantages that attract new residents every year. A strong job market creates opportunities in fields like cybersecurity, communications, tourism and the military.
The temperate climate also lures those looking to escape extreme heat or cold. Outdoor activities like hiking, biking, and water sports are easily accessible year-round.
For these reasons, San Diego scored highly on the Desirability Index, boosting its overall ranking. People decide the benefit of the San Diego lifestyle is worth the inflated costs.
Methodology Focuses on Broad Quality of Life
The U.S. News & World Report rankings aim to provide a comprehensive assessment of the best places to live. Four indexes make up each city’s overall score:
- Quality of Life Index (36% weighting) – cost of living, crime rates, quality of education
- Value Index (23% weighting) – cost of living compared to median household income
- Desirability Index (22% weighting) – surveys residents on ideal places to live
- Job Market Index (19% weighting) – strength of job market, unemployment, average salary
This multi-factor approach accounts for how affordable and livable cities are for the average resident. While expensive, San Diego offers advantages that make city life worthwhile for many.
The report provides an illuminating comparison of costs and benefits across America’s major metropolitan areas. The California cities at the top offer economic opportunities, but the price tag to live there keeps rising.