The Most Expensive Cities?
By Steve Gillman - 2011
Which are the most expensive cities for buying a home in the
United States? That's not as easy as you might think to answer.
There are a number of ways to measure these things. The average
home prices could be used, for example, without other considerations.
That's a relatively simple measure, but it ignores the job and
Often a ratio is used to determine where it is expensive to
buy a home. The most expensive cities are those where the ratio
of average home price to median salary is highest. In other words,
houses that are a little more pricey can be more affordable if
wages are a lot higher in a given locale. That's one of the criteria
used for a recent article in Forbes, titled; America's Most Overpriced Cities.
They found that Los Angeles, California was the most expensive
place in the country to buy a home. Fresno, California and Miami,
Florida took second and third places. The fourth city on the
list is a good example of how difficult it is to answer the question
for an individual buyer.
McAllen, Texas has cheap clothing, gas and food, and even
the houses go for a median price of just $107,000, which is much
lower than many areas of the country. But because of the low
median salary there ($33,700 versus $64,200 nationwide), it is
rated as one of the most expensive cities. If you happen to have
a decent job there, though, or if you were given a choice to
transfer there at the same rate of pay, it would be a cheap place
to live and to buy a house.
Another problem with survey like the one done by Forbes, is
that they must by nature set criteria for inclusion that exclude
some towns. In this case they looked at only large cities (metropolitan
area of over $600,000). While there have to be some criteria
used, in this case they leave out a lot of places you might consider
There is another, more fundamental problem with the methodology
used for measurements like this. It becomes obvious when you
see that there are several cities in southern Florida on the
list. It is true that houses are still expensive in Miami, Fort
Lauderdale, and other areas of Florida. But condominiums are
For example, in Naples, Florida (not on the list because of
the small metropolitan area), a decent three-bedroom house in
a nice neighborhood will cost you at least $200,000. But you
can get the same square-footage and more amenities in a condo
for under $100,000. The monthly costs will be less as well, despite
the association dues, because of lower property taxes and insurance
Clearly, a survey that looks at only the average prices of
housing does not answer the question which most people would
like answered for a prospective new hometown; Are there many
places to buy that I can afford. So while it is fun and interesting
to look at a list of the most expensive cities, if you have a
personal interest you might want to do a bit more research on
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