A recent report highlights a growing challenge by categorizing certain major cities as “impossibly unaffordable.” This report compares median incomes to median housing prices and reveals how the pandemic-driven demand for homes with outdoor space, zoning policies that limit urban expansion, and the influx of investors have driven prices sky-high.
The annual Demographia International Housing Affordability survey, which has been analyzing housing prices for 20 years, shows that cities on the U.S. West Coast and in Hawaii hold five of the top ten spots for the least affordable places to buy a home. San Jose, Los Angeles, San Francisco, and San Diego in California, along with Honolulu in Hawaii, are among the most expensive cities for homebuyers.
The top 10 “Impossibly Unaffordable” Cities
The report measures affordability using a price-to-income ratio, which is the median housing price divided by the gross median household income. It links the rise of remote work since the pandemic with a “demand shock” for homes that offer more outdoor space, away from urban areas.
San Diego has surpassed New York City, which has traditionally been known as the most expensive city. Meanwhile, eight of the eleven cities ranked in the study are in California. San Diego tops the list, followed by Los Angeles, Santa Barbara, San Francisco, Salinas, Santa Rosa, Vallejo, and Fairfield.
Here is the full list of the world impossibly unaffordable cities:
- Hong Kong
- Sydney
- Vancouver
- San Jose
- Los Angeles
- Honolulu
- Melbourne
- San Francisco/Adelaide
- San Diego
- Toronto
How Much Does It Cost to Live in San Diego, California?
According to PayScale, San Diego’s cost of living is 47% higher than the national average. Consequently, rent, food, and other essentials are more expensive than what you might pay in a small town in Arkansas.
If you’re considering moving to the city, you’ll need to factor in the high cost of rent and possibly put savings on hold for a while. To give you an idea, the average monthly rent for a one-bedroom apartment is around $2,400. However, rental prices vary by neighborhood:
- In Carmel Valley, the average rent is the highest at $3,944 per month.
- In Alta Vista, rent is more affordable at $1,300 per month.
- In San Diego’s most famous neighborhood, La Jolla, the rent averages $2,558 per month, which is cheaper compared to other neighborhoods in the city.
Now, if you’re planning to buy a house, according to Zillow, the typical home value in San Diego is $873,825, which is a 6% increase from last year. This may seem high, but there are also less expensive homes available.
Did you ever think San Diego would surpass New York as one of the impossibly unaffordable cities?
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