The excessive price of residing in San Francisco defined

San Francisco is one of the 10 most expensive cities in the world. The City by the Bay received the dubious honor based on a cost-of-living survey conducted by the Economist Intelligence Unit (EIU), a research group. The analysis takes into account hundreds of factors, including the price of goods and services, as well as the cost of utilities, car payments, and housing.

The average cost of living in San Francisco in numbers

To understand how expensive San Francisco is, consider these facts:

• In 2022, the cost of housing in the greater San Francisco-Oakland-Berkeley area was 113% and utilities 67.5% higher than the state average, according to federal data.

• The overall price of goods in San Francisco, including clothing and groceries, education, medical expenses, recreational and transportation services, was 19.8% above the national average, according to the same report.

• The average rent for a one-bedroom apartment in San Francisco is $3,020, according to Zumper data as of October 2022. Despite being cheaper than before the pandemic, San Francisco is still the third most expensive city to rent in the US

The cost of living in San Francisco compared to New York, Los Angeles, Seattle and the rest of the world

In 2022, San Francisco was the 8th most expensive city in the world, slightly more expensive than Paris, Copenhagen and Sydney but cheaper than Los Angeles, which ranks fourth with Hong Kong. New York and Singapore are the most expensive cities in the world. Tel Aviv is in third place, Zurich and Geneva in sixth and seventh.

Seattle doesn’t make the top 10 most expensive cities list; According to Forbes, the cost of living there is 22% lower than in San Francisco.

The San Francisco Financial District rises above a residential street in San Francisco, California.

Alexander Spatari/Getty Images

History repeats itself: San Francisco has always been an expensive city

San Francisco’s boomtown origins mean its history of fierce competition and price gouging stretches back almost 200 years. In fact, San Francisco was even more expensive relative to income during the gold rush than it is today or during its dot-com boom.

According to Smithsonian Magazine, a dozen eggs bought in a San Francisco store in 1849 cost the equivalent of $90 today. This year, individual hotel rooms were rented out to professional gamblers for the equivalent of $300,000 a month.

San Francisco has a long history of what many would describe as opportunistic housing practices. After the 1906 earthquake and fire that devastated the city, the landlords of the houses that were not destroyed raised rents for tenants and even forced those who earned good wages into refugee camps, according to SFist and a July newspaper clipping 1906 from the San Francisco Call.

Since the precious metals booms contributed to high prices back then, the tech industry could be contributing to the high cost of living today.

Alexander Fromm Lurie, a San Francisco real estate consultant at Compass, points out that the region’s tech jobs, which according to Bloomberg account for over 30% of San Francisco’s personal wages, are largely to blame. “The Bay Area has one of the strongest economies in the world, which attracts talent and injects an abundance of funds into the region,” Lurie wrote in an email. Add to that high salaries — according to Bloomberg, the average tech earns $165,000 a year — resulting in “high housing costs,” Lurie explains.

But not even every technician can shop here. According to the California Association of Realtors, it takes a San Francisco man nearly $400,000 to buy a middle-income home.

The Painted Lady at Alamo Square in San Francisco, California.

Alexander Spatari/Getty Images

It’s a buyer’s market – for now

Though home prices are well above the national average, San Francisco is no longer the country’s most priceless housing market, according to a March 2022 report. Lurie explains that the market is cooling off after a decade of massive property appreciation following the 2008 recession. “There are some spectacular prices for buyers right now,” he writes. A national real estate report by RE/MAX estimates that home prices are down 5.1% year over year.

A recent survey of real estate agents shows that San Francisco isn’t the seller’s market it was a short time ago. According to real estate company HomeLight, in the fourth quarter of 2022, only 30% of agents said their market was a seller’s market. Just six months earlier, 95% of respondents said they were in a seller’s market.

But Lurie doesn’t expect relatively low home prices to last long. “I believe that within a few years we will see the San Francisco housing market recover significantly from its current levels.”

This story was edited by Hearst National Editor Kristina Moy; You can contact her at kristina.moy@hearst.com.