California is still king when it comes to expensive metro areas.
That’s according to a new analysis by The Business Journals that looked at the latest regional price parity data from the Bureau of Economic Analysis to identify the 30 least affordable metro areas in the nation. The latest data looks at the price picture in 2019. The final list included 32 metros due to a tie for 30th place.
California dominated the ranking, accounting for 13 of the 32 spots and seven of the top 10. View the entire list in the gallery above.
As our sister publications have noted, several other states are using California’s costs to gain leverage in recruiting both people and companies. That’s particularly true in Texas and the Southeast, where communities are making the case companies can make the move and save considerably on their labor costs because of the relative affordability. No metros in those regions appeared on the list of the least affordable metros — although they dominate the list of the fastest-growing cities in the U.S.
The regional price parity index totals show how costs compare in a metro compared to the national baseline of 100. That means a metro with an index of 134 would be 34% more expensive than the national average, for example.
Because the latest data covers 2019, it doesn’t factor in the cost increases that have occurred since Covid-19 – such as the steep run-up on materials and housing’s hot streak – but history shows the metros near the top have long-term staying power.
A total of 25 of the most expensive metro areas in 2019 were also on the list in 2008, including all of the top 20.
Experts have said affordability could prove pivotal in the bid to attract newly remote workers who are no longer tethered to a specific metro area for their job. Many cities are sweetening the pot by offering cash incentives to lure those employees and their families.
One of the most common denominators among the 30 least affordable metros was rent costs, with 21 of the top 32 also ranking among the most expensive markets for rent.
That includes San Jose and San Francisco, which were the only metros with a rent index score above 200.
California accounted for nine of the top 10 metros for rent costs.
At the other end of the spectrum was Beckley, West Virginia; Florence-Muscle Shoals, Alabama; and Johnstown, Pennsylvania; which were the only metros with a rent index under 50.
The Villages metro area in Florida, which was the nation’s fastest-growing metro over the past decade, posted the strongest increase in costs among any metro in the analysis – with total regional price parity index rising by 12.5 points.
Overall, 109 of the metro areas included in the analysis saw an increase in their overall RPP index, while 265 posted a decline. But 23 of the 32 most expensive metros recorded an increase.
Only two of the most expensive metro areas – New Haven and Bridgeport, Connecticut – ranked among the metros with the steepest declines in their overall RPP index between 2008 and 2019.