The excessive value of dwelling in San Francisco defined

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

The average cost of living in San Francisco, by the numbers

To comprehend just how expensive San Francisco is, consider these facts:

• In 2022, housing costs were 113% higher and utilities costs were 67.5% higher in the San Francisco-Oakland-Berkeley metro area than the national average, according to federal data.

• The overall price of goods in San Francisco, including apparel and food, education, medical expenses, recreation and transportation services, was 19.8% higher than the national average, according to the same report.

• The median rent for a one-bedroom apartment in San Francisco is $3,020, according to October 2022 data from Zumper. Although this is less expensive than it was pre-pandemic, San Francisco is still the third most expensive city for renters in the US

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

In 2022, San Francisco was the eighth most expensive city in the world, slightly more expensive than Paris, Copenhagen and Sydney, but less expensive than Los Angeles, which is tied with Hong Kong at number four. New York and Singapore are tied for the most expensive cities in the world. Tel Aviv comes in third, and Zurich and Geneva are numbers six and seven, respectively.

Seattle does not make the list of the 10 most expensive cities; the cost of living there is 22% lower than San Francisco’s, according to Forbes.

San Francisco’s financial district looms over a residential street in San Francisco, Calif.

Alexander Spatari/Getty Images

History repeats: San Francisco has always been an expensive city

San Francisco’s origins as a boom town mean its history of steep competition and price gouging goes back almost 200 years. In fact, during the Gold Rush, relative to incomes, San Francisco was even more expensive than it is today or during its dot-com boom.

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

San Francisco has a long history of what many would call opportunist housing practices. Following the 1906 earthquake and fire that devastated the city, landlords of the homes that were not destroyed, raised rents on tenants and forced even those making good wages into refugee camps, according to SFist and a July 1906 newspaper clipping from the San Francisco Call.

As the booms in precious metals contributed to high prices back in the day, the tech industry may be a contemporary contributor to the high cost of living.

Alexander Fromm Lurie, a San Francisco real estate advisor with Compass, points to the region’s tech jobs, which Bloomberg says make up over 30% of San Francisco’s private wages, as being largely responsible. “The Bay Area has among the strongest economies in the world, which attracts talent and infuses an abundance of money in the region,” Lurie writes in an email. With that, comes high salaries — according to Bloomberg, the average tech worker makes $165,000 a year — which results in “high housing costs,” Lurie explains.

But not even every tech worker can buy here. According to data from the California Association of Realtors, a San Franciscan needs to make nearly $400,000 to buy a median-income house.

The Painted Ladies at Alamo Square in San Francisco, Calif.

Alexander Spatari/Getty Images

It’s a buyer’s market — for now

Despite home prices remaining well above the national average, San Francisco is no longer the most unaffordable housing market in the country, according to a March 2022 report. Lurie explains that the market is cooling after a decade of massive housing appreciation that followed the 2008 recession. “There are some spectacular prices for buyers at the moment,” he writes. A national housing report by RE/MAX estimates that home prices are down 5.1% compared to the previous year.

A recent survey of real estate agents shows San Francisco is no longer the seller’s market it recently was. According to real estate company HomeLight, only 30% of agents said their market was a seller’s market in the fourth quarter of 2022. Just six months earlier, 95% of respondents said they were in a seller’s market.

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

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