Thursday, 13 January 2011

What is cost of living in Sillicon Valley?

What is cost of living in Sillicon Valley?

There are so many cost of living index but I find the ACCRA Cost of Living Index (COLI) quite accurate.

The ACCRA Cost of Living Index measures regional differences in the cost of consumer goods and services, excluding taxes and non-consumer expenditures, for professional and managerial households in the top income quintile. It is based on more than 90,000 prices covering 60 different items for which prices 
are collected quarterly by chambers of commerce, economic development organizations, and university applied economic centers in each participating urban area. Small differences should not be interpreted as showing a measurable difference.

The composite index is based on six component categories – housing, utilities, grocery items, transportation, health care and miscellaneous goods and services.

As you can see Northern California and NY metro dominate Top (or Worst) 10 markets.

Ranking Urban Areas Index Ranking Urban Areas Index
1 New York (Manhattan) NY 207.9 
2 New York (Brooklyn) NY 181.3 
3 Honolulu HI 167.8 
4 San Francisco CA 162.0 
5 New York (Queens) NY 158.5
6 San Jose CA 152.4
7 Truckee-Nevada County CA 147.4 
8 Orange County CA 145.7 
9 Oakland CA 144.0
10 Nassau County NY 144.
* US average is 100.

* if you look into detail of COLI, you see that expesive housing is the key reason for high cost of living in above markets. SF Housing index 273 Vs Houston's 80.
Remember, on top of it, if you make $100K+, you are charged approx. 10% on California state tax and, because of progressive tax system, you end up paying more if you get salary rise.....

Having said that, living in SF Bay Area comes with special perks such as:

- Weather is considered one of the most desirable in US.

- High Quality of Living (no consideration on cost) Ranked 6th out of 241 metros

- Highest concentration of tech jobs and salary level

- Lastly, Approx 29% of VC fund goes to SV in 2009 --- more opportunity to build significant wealth. 

Hope it helps.

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