Author Topic: What cities do you consider to be HCOLA?  (Read 8322 times)

Arbitrage

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What cities do you consider to be HCOLA?
« on: November 18, 2019, 09:26:11 AM »
I read a comment elsewhere, calling Atlanta a HCOLA, that really surprised me a few days ago, but then I stepped back and realized that perhaps I should be questioning my own assumptions, and I could be biased by my own situation.  The term is thrown around frequently, but how do different people interpret it?

When discussing High Cost-of-Living Areas in the USA, I pretty much had settled, in my mind on the metropolitan areas of:

New York
San Francisco/San Jose Bay Area
Los Angeles
Boston
Washington, DC
Seattle
San Diego
Honolulu

You could probably place Manhattan and San Francisco+areas of the peninsula in another tier, but I'm setting that aside for now.

Places like Denver, Chicago, Portland, Dallas, Miami, etc. are MCOLA in my mind.

Also, the discussion is really about major metro areas - of course there are destinations/suburbs that are just as expensive if not moreso than many of those above (e.g. Jackson Hole, Aspen, Santa Barbara), but it's not worth trying to call out all of the little expensive pockets in generalities, unless someone is discussing their specific situation.

I definitely disagree with calling Atlanta HCOLA, but what is your perspective?  Are there cities missing from the list above?  Where would you draw the line?

SimpleCycle

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Re: What cities do you consider to be HCOLA?
« Reply #1 on: November 18, 2019, 10:00:14 AM »
Los Angles and Chicago are pretty comparable in terms of COL.  San Diego too.  I don't consider any of those cities particularly HCOL, but they are more expensive than say, Akron, OH.

The problem with defining HCOL narrowly is that you then end up classifying most of the country as LCOL, even if there may be meaningful differences in COL among those places.

I'd say there are tiers of HCOL,

VHCOL - New York City, San Francisco Bay Area
HCOL - Boston, Washington D.C., Seattle, Honolulu
MHCOL - Most other large higher cost cities - Chicago, Los Angeles, Houston, Miami, Atlanta, etc.

Which isn't to say the COL is identical within tiers either, but they're in the same category and different from those in another category.  Even within a city there are huge ranges of housing prices, and some of living in higher cost areas is a choice.

EricEng

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Re: What cities do you consider to be HCOLA?
« Reply #2 on: November 18, 2019, 10:08:56 AM »
There's Ultra High Cost, like San Francisco and New York City and then there's the rest on your list that I would call High with a few being medium if you count suburbs within 20-25 min drive.  Denver has upgraded from MCOL to HCOL over the last 5-7 years, very onpar with Northern VA/DC suburbs.

Don't know enough about Atlanta, but am surprised it is above MCOL.

Paul der Krake

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Re: What cities do you consider to be HCOLA?
« Reply #3 on: November 18, 2019, 10:12:21 AM »
Portland definitely HCOL.

Atlanta definitely not.

SimpleCycle

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Re: What cities do you consider to be HCOLA?
« Reply #4 on: November 18, 2019, 10:26:39 AM »
One way to look at this is to look at the locality pay differentials for the federal GS scale, although it is by MSA so tends to be a little off. (Seattle and Tacoma have very different COL, same with Boston and Worcester).

According to that metric, San Fransisco is highest COL, followed by NYC, followed by Houston (?!?), followed by Los Angeles.  Then there's a big group that are all around the same rate, and they include Boston, Seattle, Chicago, Detroit/Ann Arbor, Denver, Hartford, Washington D.C., San Diego, and the entire state of Alaska.  Both Portland, OR and Atlanta are well below that group.

https://www.federalpay.org/gs/locality

mm1970

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Re: What cities do you consider to be HCOLA?
« Reply #5 on: November 18, 2019, 10:59:53 AM »
There are a number of smaller cities that fall into the HCOL definition too.

I live in Santa Barbara where the median home price is over a million, the median household income is about $65k, and the median rent on a 2BR apt is $2700/month.  (49.8% of the median income).

I would define a HCOL city as one where the median rent on a 2BR apt, divided by the median household income, is >35%.
At 50%, you are certainly VHCOL.

socaso

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Re: What cities do you consider to be HCOLA?
« Reply #6 on: November 18, 2019, 11:15:26 AM »
Los Angles and Chicago are pretty comparable in terms of COL.  San Diego too.  I don't consider any of those cities particularly HCOL, but they are more expensive than say, Akron, OH.

The problem with defining HCOL narrowly is that you then end up classifying most of the country as LCOL, even if there may be meaningful differences in COL among those places.

I'd say there are tiers of HCOL,

VHCOL - New York City, San Francisco Bay Area
HCOL - Boston, Washington D.C., Seattle, Honolulu
MHCOL - Most other large higher cost cities - Chicago, Los Angeles, Houston, Miami, Atlanta, etc.

Which isn't to say the COL is identical within tiers either, but they're in the same category and different from those in another category.  Even within a city there are huge ranges of housing prices, and some of living in higher cost areas is a choice.

I agree with your 3 tiers approach but I can't agree with Los Angeles being in the same category as Chicago and Atlanta. Los Angeles is wildly expensive. I have lived in all three of these cities. LA definitely belongs in the HCOL category.

SimpleCycle

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Re: What cities do you consider to be HCOLA?
« Reply #7 on: November 18, 2019, 11:28:25 AM »
I agree with your 3 tiers approach but I can't agree with Los Angeles being in the same category as Chicago and Atlanta. Los Angeles is wildly expensive. I have lived in all three of these cities. LA definitely belongs in the HCOL category.

Yeah, I think I am off in my impression of Los Angeles cost of living.

Arbitrage

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Re: What cities do you consider to be HCOLA?
« Reply #8 on: November 18, 2019, 11:43:06 AM »
There are a number of smaller cities that fall into the HCOL definition too.

I live in Santa Barbara where the median home price is over a million, the median household income is about $65k, and the median rent on a 2BR apt is $2700/month.  (49.8% of the median income).

I would define a HCOL city as one where the median rent on a 2BR apt, divided by the median household income, is >35%.
At 50%, you are certainly VHCOL.

Well, I agree, but if you reread my post you'll see that I specifically addressed that - I even used Santa Barbara as an example.

mcneally

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Re: What cities do you consider to be HCOLA?
« Reply #9 on: November 18, 2019, 11:53:54 AM »
Houston (?!?)
I heard somewhere that the federal payscale for Houston is higher because there are so many other higher paying jobs there that the feds had to make it higher than the actual COL to attract employees. I don't know if that's true.

Arbitrage

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Re: What cities do you consider to be HCOLA?
« Reply #10 on: November 18, 2019, 11:59:04 AM »
I agree with your 3 tiers approach but I can't agree with Los Angeles being in the same category as Chicago and Atlanta. Los Angeles is wildly expensive. I have lived in all three of these cities. LA definitely belongs in the HCOL category.

Yeah, I think I am off in my impression of Los Angeles cost of living.

If I just use house prices as a proxy for COL (obviously not the only factor, but certainly the largest), LA definitely belongs in the top tier, or second tier if you want an Ultra-high tier.  More expensive than any major metro other than San Francisco-San Jose (New York gets washed out by some of the outlying areas if you consider the whole metro).  The rest of my original list would be good, except that Denver is about the same as DC, so if you include one, you'd have to include the other.  Portland is around that same level, so it would depend on where you want to draw the line.  Chicago is cheaper in terms of house price, but if I'm plugging comparisons in various online COL calculators it ends up comparable to Denver.

Atlanta doesn't deserve to be in the discussion by nearly any reasonable metric, unless you're only comparing it to the South. 

Villanelle

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Re: What cities do you consider to be HCOLA?
« Reply #11 on: November 18, 2019, 12:46:24 PM »
I agree with your 3 tiers approach but I can't agree with Los Angeles being in the same category as Chicago and Atlanta. Los Angeles is wildly expensive. I have lived in all three of these cities. LA definitely belongs in the HCOL category.

Yeah, I think I am off in my impression of Los Angeles cost of living.

If I just use house prices as a proxy for COL (obviously not the only factor, but certainly the largest), LA definitely belongs in the top tier, or second tier if you want an Ultra-high tier.  More expensive than any major metro other than San Francisco-San Jose (New York gets washed out by some of the outlying areas if you consider the whole metro).  The rest of my original list would be good, except that Denver is about the same as DC, so if you include one, you'd have to include the other.  Portland is around that same level, so it would depend on where you want to draw the line.  Chicago is cheaper in terms of house price, but if I'm plugging comparisons in various online COL calculators it ends up comparable to Denver.

Atlanta doesn't deserve to be in the discussion by nearly any reasonable metric, unless you're only comparing it to the South.

What are you using that says Denver is the same as DC?

I think that using housing prices only creates some very misleading perspectives.

I also think that the way to best calculate this depends on how you are going to use the information.  Best place to retire?  Best place to work?  Several years ago, there was some list that came out about least affordable cities (or maybe it was just least affordable housing) and I recall San Diego being #2, meaning it was more expensive than either SF or NYC.  That's because this particular study also looked at average salaries.  San Diego had expensive housing (and unless it has changed, gas was also very expensive there) but not the inflated San Francisco type salaries to go with it. 

Also, I haven't spent much time in Denver but have several family members in the area, some who moved from SoCal (Orange County).  I find it very, very difficult to believe that Denver costs are comparable to DC.  Well, unless you are willing to count places with a >60 minute commute *maybe*. 

And that's another difficulty with this kind of question.  How much sprawl do you include in your calculations. 

For San Diego, do you include Temecula?  Some people do make that commute.  Do you include only the city of San Diego, in which case you removed some of the most expensive areas (Coronado, La Jolla) but also some of the more reasonable areas that are still fairly central.  The Country?  Again, then you chop off some areas that are outliers in terms of price. 

So no calculation is going to be perfect. 

mathlete

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Re: What cities do you consider to be HCOLA?
« Reply #12 on: November 18, 2019, 12:49:34 PM »
Here's a listing of median listing price for existing single family homes by metropolitan statistical area.

https://www.nar.realtor/sites/default/files/documents/metro-home-prices-q3-2019-ranked-median-single-family-2019-11-07.pdf

That's a decent enough proxy for COL.

Car Jack

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Re: What cities do you consider to be HCOLA?
« Reply #13 on: November 18, 2019, 12:56:39 PM »
Atlanta.....no.

I go onto zillow and look for houses with a max price of $100k and there are hundreds.  In my town, 25 miles west of Boston, at double that, there are only 2.  NYC and Silicon Valley are Very High Cost of Living.

Arbitrage

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Re: What cities do you consider to be HCOLA?
« Reply #14 on: November 18, 2019, 01:01:11 PM »
Does thiss include the whole metro area or just the actual city? Its almost impossible to exclude adjacent towns in places like the LA metro area, and each will have it's own COL standard - at least for housing costs.

 I live in Orange County which is a physically small area of 3 million adjacent to LA county and LA metro area. Housing-wise it is more expensive than LA but otherwise costs are the same for food, utilities, taxes, etc. Much of it depends on if you live in expensive Newport or Laguna Beach, or more inland in a modest house. While housing is expensive thru out the county, coastal areas or areas seen as more desirerable cost a lot more.

I consider all of coastal SoCal, and the LA/OC metro area to be HCOL on par with NYC and Boston. Other areas might be higher cost for food or heating/cooling costs or various taxes and insurances, which could make them more, or less, expensive.

This recent article compared various cities based on the cost of a one bedroom apt, utilities, food, gas, etc. LA ranked 8th, Seattle 9th, DC 7th...

https://www.google.com/amp/s/www.bizjournals.com/losangeles/news/2019/08/27/how-l-a-other-socal-cities-compare-on-cost-of.amp.html

I personally include LA/OC as one metro, which offends some of my OC friends, but I think it's really hard to justify separating the two.  I pretty much agree with your post. 

Arbitrage

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Re: What cities do you consider to be HCOLA?
« Reply #15 on: November 18, 2019, 01:08:28 PM »
I agree with your 3 tiers approach but I can't agree with Los Angeles being in the same category as Chicago and Atlanta. Los Angeles is wildly expensive. I have lived in all three of these cities. LA definitely belongs in the HCOL category.

Yeah, I think I am off in my impression of Los Angeles cost of living.

If I just use house prices as a proxy for COL (obviously not the only factor, but certainly the largest), LA definitely belongs in the top tier, or second tier if you want an Ultra-high tier.  More expensive than any major metro other than San Francisco-San Jose (New York gets washed out by some of the outlying areas if you consider the whole metro).  The rest of my original list would be good, except that Denver is about the same as DC, so if you include one, you'd have to include the other.  Portland is around that same level, so it would depend on where you want to draw the line.  Chicago is cheaper in terms of house price, but if I'm plugging comparisons in various online COL calculators it ends up comparable to Denver.

Atlanta doesn't deserve to be in the discussion by nearly any reasonable metric, unless you're only comparing it to the South.

What are you using that says Denver is the same as DC?

I think that using housing prices only creates some very misleading perspectives.

I also think that the way to best calculate this depends on how you are going to use the information.  Best place to retire?  Best place to work?  Several years ago, there was some list that came out about least affordable cities (or maybe it was just least affordable housing) and I recall San Diego being #2, meaning it was more expensive than either SF or NYC.  That's because this particular study also looked at average salaries.  San Diego had expensive housing (and unless it has changed, gas was also very expensive there) but not the inflated San Francisco type salaries to go with it. 

Also, I haven't spent much time in Denver but have several family members in the area, some who moved from SoCal (Orange County).  I find it very, very difficult to believe that Denver costs are comparable to DC.  Well, unless you are willing to count places with a >60 minute commute *maybe*. 

And that's another difficulty with this kind of question.  How much sprawl do you include in your calculations. 

For San Diego, do you include Temecula?  Some people do make that commute.  Do you include only the city of San Diego, in which case you removed some of the most expensive areas (Coronado, La Jolla) but also some of the more reasonable areas that are still fairly central.  The Country?  Again, then you chop off some areas that are outliers in terms of price. 

So no calculation is going to be perfect.

See the link by mathlete above, for one.  I personally rank DC as higher cost than Denver (as in my initial list), but others seem to disagree - and Denver house prices have been spiking.  I certainly haven't dug deeply enough to know all of the latest and greatest statistics. 

I think you have to eliminate exurbs from the calculus.  Of course - how do you perfectly quantify what an exurb is?  And yes, house prices aren't everything, but they're a good starting point, and they capture much of the big disparities between regions.  Even within just using house price, though, the whole story doesn't get told; you need to figure out what that median house price is buying.  Is it a 4-bed, 3-bath house on a quarter acre?  Is it a 2-bed, 2-bath on a postage stamp lot?

The goal of this post was really just to generate discussion from different perspectives - people throw out the acronyms (VH, H, M)COLA or whatever, but I was curious how much agreement there really is in those terms.

mm1970

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Re: What cities do you consider to be HCOLA?
« Reply #16 on: November 18, 2019, 02:02:08 PM »
There are a number of smaller cities that fall into the HCOL definition too.

I live in Santa Barbara where the median home price is over a million, the median household income is about $65k, and the median rent on a 2BR apt is $2700/month.  (49.8% of the median income).

I would define a HCOL city as one where the median rent on a 2BR apt, divided by the median household income, is >35%.
At 50%, you are certainly VHCOL.

Well, I agree, but if you reread my post you'll see that I specifically addressed that - I even used Santa Barbara as an example.
I'm sure that plenty of other people consider SB a destination, but lots of us actually live here.  And our "area" is around 200,000 people.  Not MAJOR metro, but not small either.

Quote
Does thiss include the whole metro area or just the actual city? Its almost impossible to exclude adjacent towns in places like the LA metro area, and each will have it's own COL standard - at least for housing costs.

 I live in Orange County which is a physically small area of 3 million adjacent to LA county and LA metro area. Housing-wise it is more expensive than LA but otherwise costs are the same for food, utilities, taxes, etc. Much of it depends on if you live in expensive Newport or Laguna Beach, or more inland in a modest house. While housing is expensive thru out the county, coastal areas or areas seen as more desirerable cost a lot more.

I consider all of coastal SoCal, and the LA/OC metro area to be HCOL on par with NYC and Boston. Other areas might be higher cost for food or heating/cooling costs or various taxes and insurances, which could make them more, or less, expensive.

This recent article compared various cities based on the cost of a one bedroom apt, utilities, food, gas, etc. LA ranked 8th, Seattle 9th, DC 7th...

https://www.google.com/amp/s/www.bizjournals.com/losangeles/news/2019/08/27/how-l-a-other-socal-cities-compare-on-cost-of.amp.html

I agree with this too, and maybe just call it the Coastal California tax?  A lot of people think that SB is becoming an extension of LA.  I don't think it's that bad yet.

JLee

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Re: What cities do you consider to be HCOLA?
« Reply #17 on: November 18, 2019, 03:30:47 PM »
I agree with your 3 tiers approach but I can't agree with Los Angeles being in the same category as Chicago and Atlanta. Los Angeles is wildly expensive. I have lived in all three of these cities. LA definitely belongs in the HCOL category.

Yeah, I think I am off in my impression of Los Angeles cost of living.

If I just use house prices as a proxy for COL (obviously not the only factor, but certainly the largest), LA definitely belongs in the top tier, or second tier if you want an Ultra-high tier.  More expensive than any major metro other than San Francisco-San Jose (New York gets washed out by some of the outlying areas if you consider the whole metro).  The rest of my original list would be good, except that Denver is about the same as DC, so if you include one, you'd have to include the other.  Portland is around that same level, so it would depend on where you want to draw the line.  Chicago is cheaper in terms of house price, but if I'm plugging comparisons in various online COL calculators it ends up comparable to Denver.

Atlanta doesn't deserve to be in the discussion by nearly any reasonable metric, unless you're only comparing it to the South.

I just got back from a week in Denver - housing prices seemed similar to northern NJ, with the notable exception of property taxes being $10k+ less per year. That has a more significant impact on housing cost than the price of the house itself, IMO.

Schaefer Light

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Re: What cities do you consider to be HCOLA?
« Reply #18 on: November 19, 2019, 04:33:36 PM »
Atlanta is cheap compared to San Francisco, Seattle, or NYC, but it's pretty expensive compared to most other southern towns.  And I think there is definitely an affordable housing shortage in Atlanta right now.  Nearly all of those $100k homes that show up on a Zillow search are teardowns.  I clicked on several of them and there wasn't a single one that appeared to be livable.  In my part of Atlanta, teardowns cost $200k right now.  And I'm not in a ritzy area.

Personally, I think all cities are HCOL.  You get so much more home for your money if you don't live close to a big city.

« Last Edit: November 19, 2019, 04:40:41 PM by Schaefer Light »

Greystache

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Re: What cities do you consider to be HCOLA?
« Reply #19 on: November 20, 2019, 08:04:25 AM »
I think it depends upon whether you are working or retired.  I am retired and own my own home in coastal SoCal and my cost of living is not bad at all. I live quite well on $60K a year. I could cover my essential costs for about half that much. Low property taxes, low utilities cost, low income taxes on US median income. However, when I was working and had a higher income and was still paying for my house, I would have agreed that SoCal is high cost of living. When I compare living in SoCal to low cost of living cities in crappy climates, I always note the cost of heating and cooling and maintaining a house. They will spend more in a month for heating and cooling than I do for the whole year.

Arbitrage

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Re: What cities do you consider to be HCOLA?
« Reply #20 on: November 20, 2019, 08:23:26 AM »
I think it depends upon whether you are working or retired.  I am retired and own my own home in coastal SoCal and my cost of living is not bad at all. I live quite well on $60K a year. I could cover my essential costs for about half that much. Low property taxes, low utilities cost, low income taxes on US median income. However, when I was working and had a higher income and was still paying for my house, I would have agreed that SoCal is high cost of living. When I compare living in SoCal to low cost of living cities in crappy climates, I always note the cost of heating and cooling and maintaining a house. They will spend more in a month for heating and cooling than I do for the whole year.

There's something to it, but it should probably be mentioned that your cost-of-living seems low only because you have a tremendously expensive asset throwing off lots of imputed rent.  Selling that $1.5 million house would pay for a lot of heating and cooling, and a much bigger place, somewhere else.  Of course, you are probably benefiting a lot from Prop 13 as well...which does factor in to the cost of living in California. 

But you're certainly correct that there is quite a bit more to COL than raw house price, and that COL is not even uniform across socioeconomic classes (CA pretty friendly to long-term homeowners and moderate-to-low incomes; very unfriendly to renters/newer owners and higher incomes).

b.c.arms

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Re: What cities do you consider to be HCOLA?
« Reply #21 on: November 20, 2019, 03:55:30 PM »
I live in the Bay Area - I moved from Birmingham (Atlanta before that) and I am in constant awe here. We rent because the rent to own ratio is so bad (I think it's the worst in the country). We are moving to PHX in the Spring, my company offered to let me move without adjusting my salary

Fomerly known as something

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Re: What cities do you consider to be HCOLA?
« Reply #22 on: November 20, 2019, 05:45:20 PM »
Houston (?!?)
I heard somewhere that the federal payscale for Houston is higher because there are so many other higher paying jobs there that the feds had to make it higher than the actual COL to attract employees. I don't know if that's true.

The Federal pay scale is based on Cost of Labor not cost of Living, that is why both Houston and Detroit are higher then expected.  Oil workers and Auto Engineers.

Villanelle

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Re: What cities do you consider to be HCOLA?
« Reply #23 on: November 20, 2019, 06:30:46 PM »
Houston (?!?)
I heard somewhere that the federal payscale for Houston is higher because there are so many other higher paying jobs there that the feds had to make it higher than the actual COL to attract employees. I don't know if that's true.

The Federal pay scale is based on Cost of Labor not cost of Living, that is why both Houston and Detroit are higher then expected.  Oil workers and Auto Engineers.

If you are just looking at housing costs, you could look at the military housing allowance, for those areas that have them.  IME, it definitely isn't as accurate as it purports to be, falling far short of parity, but it's something.  It's supposed to cover the same type/size of house in each area, plus utilities. 

dougules

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Re: What cities do you consider to be HCOLA?
« Reply #24 on: November 21, 2019, 10:40:18 AM »
I live in the Bay Area - I moved from Birmingham (Atlanta before that) and I am in constant awe here. We rent because the rent to own ratio is so bad (I think it's the worst in the country). We are moving to PHX in the Spring, my company offered to let me move without adjusting my salary

What's your take on whether or not Atlanta is HCOL?  You would know better than anybody.

Atlanta is cheap compared to San Francisco, Seattle, or NYC, but it's pretty expensive compared to most other southern towns.  And I think there is definitely an affordable housing shortage in Atlanta right now.  Nearly all of those $100k homes that show up on a Zillow search are teardowns.  I clicked on several of them and there wasn't a single one that appeared to be livable.  In my part of Atlanta, teardowns cost $200k right now.  And I'm not in a ritzy area.

Personally, I think all cities are HCOL.  You get so much more home for your money if you don't live close to a big city.

To some extent that's true, but you have to compare COL to earning potential.  Atlanta has way more opportunity to earn a lot than most other smaller places in the south.  If housing costs twice as much, but you can triple your income, your COL is effectively lower. 

Villanelle

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Re: What cities do you consider to be HCOLA?
« Reply #25 on: November 21, 2019, 11:20:18 AM »
Atlanta is cheap compared to San Francisco, Seattle, or NYC, but it's pretty expensive compared to most other southern towns.  And I think there is definitely an affordable housing shortage in Atlanta right now.  Nearly all of those $100k homes that show up on a Zillow search are teardowns.  I clicked on several of them and there wasn't a single one that appeared to be livable.  In my part of Atlanta, teardowns cost $200k right now.  And I'm not in a ritzy area.

Personally, I think all cities are HCOL.  You get so much more home for your money if you don't live close to a big city.

I know you specified "cities", but if they are all high, then it seems like "high" becomes meaningless.  Implicit in "H"COL is a comparison; not everything can be high, and some are clearly much higher than others. 

Compare your comments on Atlanta to San Diego, which is a second tier HCOLA city where a teardown or nearly-so could easily be $400k.  Quick search found this, in what I believe is a somewhat sketchy neighborhood, well east of city center, business areas, and beaches.  Listing says, "Contractors, Investors, and cash buyers only. This Probate home is a fixer. This home needs TLC. "   1173 sqft 3/2  Asking $405k  https://www.zillow.com/homes/7970-San-Felipe-St-San-Diego,-CA,-92114_rb/17120191_zpid/

ysette9

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Re: What cities do you consider to be HCOLA?
« Reply #26 on: November 21, 2019, 12:30:42 PM »
A tear down for $400k or $600k sounds like a deal to me. Those usually go for over $1M in my neighborhood.

Definitely one of those subjects that is very relative.

Villanelle

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Re: What cities do you consider to be HCOLA?
« Reply #27 on: November 21, 2019, 01:44:33 PM »
A tear down for $400k or $600k sounds like a deal to me. Those usually go for over $1M in my neighborhood.

Definitely one of those subjects that is very relative.

You can definitely find that in some areas neighborhoods in San Diego, too!  I didn't want to go with an expensive neighborhood because I was comparing to SL's post about a "not ritzy" area of Atlanta.  The one I posted is, assuming things haven't changed much, probably one of the least desirable/cheapest areas in SD. 

And I definitely know SD isn't the most expensive city out there. 

Schaefer Light

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Re: What cities do you consider to be HCOLA?
« Reply #28 on: November 21, 2019, 07:39:40 PM »
Atlanta is cheap compared to San Francisco, Seattle, or NYC, but it's pretty expensive compared to most other southern towns.  And I think there is definitely an affordable housing shortage in Atlanta right now.  Nearly all of those $100k homes that show up on a Zillow search are teardowns.  I clicked on several of them and there wasn't a single one that appeared to be livable.  In my part of Atlanta, teardowns cost $200k right now.  And I'm not in a ritzy area.

Personally, I think all cities are HCOL.  You get so much more home for your money if you don't live close to a big city.

I know you specified "cities", but if they are all high, then it seems like "high" becomes meaningless.  Implicit in "H"COL is a comparison; not everything can be high, and some are clearly much higher than others. 

Compare your comments on Atlanta to San Diego, which is a second tier HCOLA city where a teardown or nearly-so could easily be $400k.  Quick search found this, in what I believe is a somewhat sketchy neighborhood, well east of city center, business areas, and beaches.  Listing says, "Contractors, Investors, and cash buyers only. This Probate home is a fixer. This home needs TLC. "   1173 sqft 3/2  Asking $405k  https://www.zillow.com/homes/7970-San-Felipe-St-San-Diego,-CA,-92114_rb/17120191_zpid/
I just meant that all cities have expensive housing compared to the surrounding areas.  If you eliminate the need to work, then you can save so much money by living in a smaller town.

Schaefer Light

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Re: What cities do you consider to be HCOLA?
« Reply #29 on: November 21, 2019, 07:59:18 PM »
A tear down for $400k or $600k sounds like a deal to me. Those usually go for over $1M in my neighborhood.

Definitely one of those subjects that is very relative.

You can definitely find that in some areas neighborhoods in San Diego, too!  I didn't want to go with an expensive neighborhood because I was comparing to SL's post about a "not ritzy" area of Atlanta.  The one I posted is, assuming things haven't changed much, probably one of the least desirable/cheapest areas in SD. 

And I definitely know SD isn't the most expensive city out there.
Part of the reason I consider Atlanta to be expensive is that it doesn't have the allure of the coast.  It doesn't even have a navigable river.  Pretty much all of these very-HCOL cities are on one coast or the other.  That factor alone always makes properties more expensive.  I tend to think you'd need to compare Atlanta to other landlocked cities (like Denver or Dallas) to get a fair comparison.

Systems101

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Re: What cities do you consider to be HCOLA?
« Reply #30 on: November 22, 2019, 09:56:30 PM »
To some extent that's true, but you have to compare COL to earning potential.

Yes.  One data point to look at is Local Purchasing Power.  There are limitations, however, since many of the UHCOL cities show decent purchasing power because the technology salaries can be insanely high... so it makes for a very hard life for the folks doing the supporting roles if the underlying cost of living is high.

To some extent that's true, but you have to compare COL to earning potential.  Atlanta has way more opportunity to earn a lot than most other smaller places in the south.  If housing costs twice as much, but you can triple your income, your COL is effectively lower.

Atlanta is 7th best - showing your comment is consistent with the data. 

That data can also be seen with Cost of Living Indexes, which I'll use instead of the government salary corrections. 

Between the two we might make 4 categories.  These are basically done by ranking the cities and taking extreme sums/difference between the ranks of COLI and LPP:
  • High COL, Low Relative Salary: Brooklyn, San Francisco, Bellevue (WA), New York, Oakland, Boston, Miami, Honolulu, Norfolk, Los Angeles
  • High COL, High Relative Salary: Seattle, San Diego, Irvine (CA), Boulder, Atlanta, San Jose, Ann Arbor, Santa Barbara, Rockville (MD), Austin
  • Low COL, High Relative Salary: Huntsville (AL), Sioux Falls, San Antonio, Arlington (TX), Oklahoma City, Tucson, Chattanooga (TN), Rochester (NY), Memphis, Lubbock (TX)
  • Low COL, Low Relative Salary: Springfield (MO), Shreveport (LA), Athens (GA), Akron (OH), Fort Myers, Columbia (SC), Augusta (GA), Dayton (OH), Winston-Salem, Mobile (AL)

jlcnuke

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Re: What cities do you consider to be HCOLA?
« Reply #31 on: November 25, 2019, 07:47:57 AM »
For absolute basics, I consider any city/area with a Cost of Living index of 120% the national average, or higher, to be high cost of living. Those cities 20% or more below the national average, I consider to be LCOL areas.

Since everyone keeps mentioning where I'm at working right now, Atlanta, I'll point out that Bestplaces.net has Atlanta's cost of living at 107.5, or 7.5% above the national average. Still squarely in the "medium cost of living" by my standards.

dougules

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Re: What cities do you consider to be HCOLA?
« Reply #32 on: November 25, 2019, 10:25:51 AM »
To some extent that's true, but you have to compare COL to earning potential.

Yes.  One data point to look at is Local Purchasing Power.  There are limitations, however, since many of the UHCOL cities show decent purchasing power because the technology salaries can be insanely high... so it makes for a very hard life for the folks doing the supporting roles if the underlying cost of living is high.

To some extent that's true, but you have to compare COL to earning potential.  Atlanta has way more opportunity to earn a lot than most other smaller places in the south.  If housing costs twice as much, but you can triple your income, your COL is effectively lower.

Atlanta is 7th best - showing your comment is consistent with the data. 

That data can also be seen with Cost of Living Indexes, which I'll use instead of the government salary corrections. 

Between the two we might make 4 categories.  These are basically done by ranking the cities and taking extreme sums/difference between the ranks of COLI and LPP:
  • High COL, Low Relative Salary: Brooklyn, San Francisco, Bellevue (WA), New York, Oakland, Boston, Miami, Honolulu, Norfolk, Los Angeles
  • High COL, High Relative Salary: Seattle, San Diego, Irvine (CA), Boulder, Atlanta, San Jose, Ann Arbor, Santa Barbara, Rockville (MD), Austin
  • Low COL, High Relative Salary: Huntsville (AL), Sioux Falls, San Antonio, Arlington (TX), Oklahoma City, Tucson, Chattanooga (TN), Rochester (NY), Memphis, Lubbock (TX)
  • Low COL, Low Relative Salary: Springfield (MO), Shreveport (LA), Athens (GA), Akron (OH), Fort Myers, Columbia (SC), Augusta (GA), Dayton (OH), Winston-Salem, Mobile (AL)

Wow, I'm surprised Huntsville topped your LCOL high salary list.  It definitely is true that COL is low and salaries are still fairly high.

I think it depends more on your purchasing power as an individual more than averages.  If you go from a minimum wage job in Cullman AL to a minimum wage job in Arlington VA, your personal purchasing power is the exact same despite a big increase in COL.  If moving to Arlington allows you to get a high paying professional job that wouldn't be possible in Cullman, then the difference will be way more than what the averages say. 

TysonGA

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Re: What cities do you consider to be HCOLA?
« Reply #33 on: November 25, 2019, 01:22:42 PM »
We lived in Atlanta for 5 years and I've been in another fairly well off town about an hour from Atlanta for the last 4+ years.  I'd say Atlanta COL is what you make of it.  Probably MCOL by most accepted standards but there are parts of town where it's pretty difficult to get a decent house under $400k and you see plenty of placed in the $1m+ range.

If you are willing to live "OTP", Outside the Perimeter, there are some very costly suburbs and some very reasonable suburbs.  Again, it's what you make of it.

The issue with OTP is that you spend a good chunk of your life in a traffic jam.

ITP or Inside the Perimeter can be HCOL if you want to be walkable and have access to food and entertainment.

The big thing here is what's your frame of reference.  If i'm comparing it to Chicago, Denver, Charlotte, etc, its MCOL but... it's fully 3x the cost of living where my wife or I grew up in midwestern small towns.

JLee

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Re: What cities do you consider to be HCOLA?
« Reply #34 on: November 25, 2019, 01:41:26 PM »
For absolute basics, I consider any city/area with a Cost of Living index of 120% the national average, or higher, to be high cost of living. Those cities 20% or more below the national average, I consider to be LCOL areas.

Since everyone keeps mentioning where I'm at working right now, Atlanta, I'll point out that Bestplaces.net has Atlanta's cost of living at 107.5, or 7.5% above the national average. Still squarely in the "medium cost of living" by my standards.

Bestplaces does not factor in state and local taxes, which is unfortunate for comparison purposes.  Property taxes on a $450k house in Denver are under $3k, but my area (with an 8.8% lower COL per BestPlaces) is about $14k.  That ~$1k/mo in home ownership costs isn't reflected in their calculations.

PeterParker

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Re: What cities do you consider to be HCOLA?
« Reply #35 on: November 25, 2019, 03:00:15 PM »
Hi guys. Two things.

Either focus on the biggest cities (the ones people actually care about and are statistically more likely to currently be living in) or at least include them.

I see several lists that do not mention Chicago or Houston at all (both Top 4 in population in the country) while mentioning FrogBalls or Akron (I would rather be homeless than live in Akron. No offense).

And instead of thinking of impressions, I would use hard data. Here's a site: https://www.nerdwallet.com/cost-of-living-calculator/compare/chicago-il-vs-houston-tx

I saw someone put Chicago and Houston in a comparable tier. Well, turns out Houston is 20% cheaper, and 43% lower in housing (which I think is less negotiable for Standard of Living) --- which rings true to me, as I've actually lived in both cities for years. That's a sizable difference.

To compare salary differences for similar job titles, I would focus on particular tools that actually estimate and record salaries at companies you're looking at.

Generally the famous coastal cities (Seattle, LA, SFC, SD, NYC, DC, Boston) are highest followed by Chicago ---- then the next tier are the Texas hubs like Houston, Austin, Dallas + Cleveland, Indi, Miami ...

It mostly comes down to population density. The cities/ states with untold fields of real estate in all directions that are still developing are cheaper.

 

Wow, a phone plan for fifteen bucks!