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When you leave the nation’s heartland and head to the coasts, the cost of living jumps. In fact, four of the most expensive cities we found are in California. The rest are along the East Coast and in far-flung Hawaii and Alaska.
To come up with our list of the priciest places to live, we looked at living expenses in metropolitan areas across the U.S., as compiled by the Council for Community and Economic Research. Its Cost of Living Index measures relative price levels for housing, utilities, transportation, grocery items, health care, and miscellaneous goods and services. We didn't include cities with populations below 50,000.
A Cost of Living Index score of 100 is the national average. The higher a score, the higher the cost of living in that city. Little Rock, Ark., and Cleveland have scores of 99.9 and 100.1, respectively, meaning they’re right in the middle in terms of living costs. We also gleaned average home prices from the Council for Community and Economic Research. Population and median household income data come from the U.S. Census Bureau.
Here are the 10 most expensive places to live in the U.S.
10. Anchorage, AK
Cost of Living Index: 134.9
City Population: 291,826
Median Household Income: $73,004 (U.S. median: $51,914)
Average Home Price: $486,859 (U.S. average: $283,529)
The vast separation from the lower 48 states makes just about everything expensive in The Last Frontier. Groceries costs about 30% more in Anchorage than in the average U.S. city. A dozen eggs goes for $2.69, 50% more than you'd typically pay. Health care, from a trip to the dentist to a bottle of ibuprofen, runs nearly 40% higher than average. Anchorage residents do benefit from the absence of state income and sales taxes, as well as from Alaska's annual dividend payment ($1,174 per eligible resident in 2011).
9. Oakland, CA
Cost of Living Index: 137.4
City Population: 386,909
Median Household Income: $49,721
Average Home Price: $592,292
Like San Francisco to its west and Silicon Valley to its south, Oakland is plagued by pricey real estate. Housing costs are double the national average, which puts a strain on working families that are earning less than the U.S. median household income. A typical Oakland apartment rents for $1,556, vs. the national average of $862. The high living costs haven’t escaped notice of the 99-percenters. Some of the most high-profile (and violent) protests related to the nationwide "Occupy" movement have taken place in Oakland.
8. Boston, MA
Cost of Living Index: 139.4
City Population: 602,609
Median Household Income: $50,684
Average Home Price: $437,000
While by no means cheap, the capital of Massachusetts is the most affordable East Coast city on our list. The distinction is thanks in large part to housing costs that are at least tolerable compared with real estate in Washington, D.C., and New York. Even so, you’ll pay 65% more than the national average for a home in Boston. In exchange for this premium, Bostonians enjoy proximity to renowned universities, art collections and historic sites.
7. Washington, D.C.
Cost of Living Index: 144.6
City Population: 584,400
Median Household Income: $58,526
Average Home Price: $729,319
The cost of living in the nation’s capital can be high, mostly due to inflated housing prices, but incomes tend to be high, too. What makes those hefty mortgages more affordable is the wealth of job opportunities throughout the metropolitan area, not only with the federal government but also with private government contractors. That's why D.C. also scores well on our list of cities with high-paying jobs.
6. Santa Ana (Orange County), CA
Cost of Living Index: 144.7 (Orange County)
City Population: 324,528
Median Household Income: $54,877
Average Home Price: $700,772 (Orange County)
Santa Ana sits at the heart of sprawling Orange County, home to some of the most exclusive and expensive neighborhoods in the nation. It serves as the county's business and government center. Nearby Orange County cities include ritzy Newport Beach, the setting for the popular television series "The O.C." With a coastline stretching from Seal Beach to San Clemente, it should come as no surprise that Orange County’s real estate is exorbitant. Housing costs are nearly 2.5 times the national average. Even looking the part of an O.C. native can strain the pocketbook. A trip to a beauty salon will set you back $60.20, compared to $33.43 nationwide.
5. Stamford, CT
Cost of Living Index: 147.4
City Population: 120,907
Median Household Income: $75,579
Average Home Price: $556,500
Stamford isn’t cheap. Far from it. Housing costs are double the national average, and other living expense run anywhere from 15% to 35% above average. But the median household income is second-highest on our list, and the easy commute into New York makes the Connecticut city a much more affordable alternative to the Big Apple. Because while housing is expensive, it still runs less than half what you’d pay for a place in Manhattan. We recently named Stamford one of the best cities in America to raise kids.
4. San Jose, CA
Cost of Living Index: 154.3
City Population: 925,300
Median Household Income: $79,405
Average Home Price: $721,200
High incomes help residents of the capital of Silicon Valley defray the high cost of living. In fact, San Jose boasts the highest median household income on our list. The city tops the U.S. median income by more than 50%. Home prices, on average, are slightly more affordable than in San Francisco and about on par with Washington, D.C. A typical apartment rents for $1,728 a month, twice the national average. San Jose has one of the highest concentrations of millionaires in the U.S.
3. Honolulu, HI
Cost of Living Index: 165.8
City Population: 953,207 (entire metro area)
Median Household Income: $70,093
Average Home Price: $637,351
Island living has its downsides. Because of its isolated location in the middle of the Pacific Ocean, Honolulu demands a pretty penny from its residents for just about everything—from utilities to transportation to health care. Housing prices are more than double the national average, and groceries cost more in this Hawaiian city than any other place we looked at—including Manhattan. A loaf of bread in Honolulu goes for $2.91, twice the average price. A half-gallon of milk costs a buck more ($3.32 vs. $2.32).
2. San Francisco, CA
Cost of Living Index: 166.5
City Population: 789,172
Median Household Income: $71,304
Average Home Price: $809,667
Living expenses in San Francisco can be as steep as the city’s famous hills. Housing prices, at nearly three times the national average, are the main culprit for the high cost of living. Only housing in New York City (specifically the boroughs of Manhattan and Brooklyn) runs more than in San Francisco. One of the few things that is cheap in this California city is wine, which sells for 15% below the national average. Napa is just an hour's drive north. San Franciscans can afford to stock up by the case. The city's median household income surpasses the U.S. median by almost $20,000 a year.
1. New York, New York
Cost of Living Index: 228.3 (Manhattan)
City Population: 8,078,471
Median Household Income: $50,285
Average Home Price: $1.27 million (Manhattan)
It should come as no surprise that New York City takes the top spot on our list of the most expensive places to live. Famously high rents and purchase prices can drain bank accounts quickly. Housing costs in Manhattan are 4.5 times the national average. Even in Brooklyn, it's 3.5 times; in Queens, more than double. High living costs don’t stop there. Steep rents and distribution costs mean groceries run more in New York City than just about anywhere else in the U.S. Consider this: A t-bone steak from a Manhattan grocer costs $14.99. In Harlingen, Texas, the cheapest place to live in America, the very same steak costs $7.26.
[Related: See the 10 Cheapest U.S. Cities to Live In]