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The 5 Most Expensive Cities to Buy Real Estate

These 5 cities are the most expensive places to buy housing. Learn how much you can expect to pay in these areas, strategies to afford housing in your ideal location, and how an agent can help you utilize the best financing options available.
most expensive cities

Buying a home often feels like a significant step in adulthood. Unfortunately, in some areas, this process may feel nearly impossible to pull off. From buyer salaries and debt to market prices, there are a variety of reasons why home ownership might feel daunting.

RealtyHop recently released a Housing Affordability Index which measures cost-of-living and market trends to provide insight into the most expensive markets to purchase real estate. We’ll take a look at the top five most expensive cities to buy real estate in, understand the reasons why, and explain possible ways to secure the right financing in these areas.

Quick Overview

The five most expensive cities were determined by RealtyHop by examining over 300,000 property listings in January 2019 and examining the American Community Survey Census data to find out if buying a home was still a realistic goal for Americans.

From there, the middle-range cost of buying a home was determined and compared to the median salary data to determine the most expensive places to own a home.

1. San Jose, CA

This city (and surrounding areas) won the number one spot as the least affordable place to live in the country. Homeowners are generally encouraged to spend less than 25% of their annual income on housing, but in San Jose, homeowners can expect to spend more than 60% of their salary on housing alone.

The city of San Jose has the second highest annual income in the country, but housing prices and property taxes are so high that more than half of that income will disappear into housing costs.

2. New York City, NY

Everyone knows how expensive it can be to live in NYC, so it’s no surprise that this eastern city earned the #2 spot on the least affordable places to buy a home. Homeowners in NYC should expect to spend around 54% of their income on housing costs.

Residents in NYC do make higher than average salaries, but when compared to high home prices and high property taxes, they’ll be lucky to keep even half of their income after paying housing expenses.

3. Los Angeles, CA

Another expensive city to reside in is LA, California. It’s not shocking that this desirable city is the third most expensive to live in. Residents here should expect to cough up at least 52% of their annual income on housing costs each year.

Like the other two cities, this steep price is caused by rising mortgages and high property taxes.

4. San Francisco, CA

California tops the list of most expensive cities to live in the US and San Francisco clocks in at #4. San Francisco’s expensive housing market and cost of living are well advertised, and residents should expect to hand over 51% of their income on housing costs.

Despite having one of the highest incomes averages in the country, San Francisco also has some of the highest mortgage and property tax expenses.

5. San Diego, CA

San Diego earns the top 5 spot on the list, with residents spending, on average, 49% of their income towards housing expenses. While it’s #5 on this list, it should also be noted that it’s the 4th city in California to make this list.

High mortgage and property taxes are also to blame for San Diego hitting the #5 spot.

How To Buy A Home In the Top 5 Most Expensive Cities

While NYC and these top 4 California cities are certainly expensive to reside within, that doesn’t mean you can’t purchase housing and pay less than the average percentage on your mortgage and taxes.

Saving up for a large down payment is a great way to reduce the amount you have to finance, leading to lower monthly payments. If you can pay more than 20% towards your down payment, you can opt out of mortgage insurance, reducing your monthly expenses even further.

In addition, putting more down up front on a home can help a buyer secure a better mortgage rate, saving them thousands in interest throughout the term of their loan.


While San Jose, NYC, LA, San Francisco, and San Diego are five of the most expensive cities to afford housing in, there are methods buyers can follow in order to afford real estate in these areas.

Working with a local real estate agent who understands the changing market is the best first step buyers should take when considering buying property. Anyone considering purchasing property — regardless of the price — should get in touch with an experienced agent first.

Clever can connect you with a professional agent near you to help you find affordable housing in one of these cities and get you a buyer’s rebate when you purchase.


Thomas O'Shaughnessy
Thomas O'Shaughnessy

Tommy O'Shaughnessy is the Head of Research at Clever Real Estate, the free online service that connects you with top local agents to save on commission. Tommy's team of data scientists create surveys, gather data, and analyze trends in housing, real estate, and personal finance. He directs public relations efforts, acting as a "data communicator" between his team and the press. Clever studies have been featured in Politico, the LA Times, CNBC, Forbes, Yahoo Finance, and other publications.

See all Thomas's Posts

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