The Cheapest International City In The World: San Francisco

9,500 sqft for only $8.9 Million in Presidio Heights, SF - cheapest international city
Guess the price of this 9,500 sqft, SF home.

The cheapest international city in the world is San Francisco. I have visited over 60 countries and over 150 cities and it is clear San Francisco provides the best lifestyle and wealth-building opportunities.

Although you might see headlines that San Francisco is one of the most expensive international cities in the world, you've got to dig deeper. With 23-year-old college graduates making $150,000+ a year, the income opportunities make San Francisco affordable.

So many of my friends who live in New York City or around the country like to say that the median rent and home price in San Francisco are our country's highest. It's simply not true.

If I had to pay $2,500 a square foot for a condo in Greenwich Village, I'd be a little bitter too about equally amazing SF property costing 40% less. Heck, you can even get panoramic ocean view properties in San Francisco for under $800 a square foot. There's no other city in the world that can boast such value.

This article will argue why I believe San Francisco continues to be the cheapest international city in the world, despite all the tremendous income opportunities. Now with artificial intelligence booming, San Francisco is even cheaper compared to income upside.

Long-Time Resident Of San Francisco

The media have a great way of misleading the public because they like to take averages and extrapolate. I am in the trenches, actually visiting open houses in NYC and SF and bidding on places. Cities are priced a certain way due to income and wealth-building opportunities.

I'm also a landlord who is very in-tune with market rents and wages for the 22-35 year old crowd. Based on the rents and incomes I've seen, San Francisco is affordable if you can land one of the many tech, internet, software, healthcare, consulting, and finance jobs.

I was just in London for Wimbledon, and places in Knightsbridge and Chelsea make Pacific Heights in San Francisco feel like Costco prices!

The Cheapest International City In The World

Let's say you are a skeptic and still think San Francisco is not the cheapest international city in the wold. That's fine. Don't listen to me and my 40+ years of experience living everywhere and working internationally.

Take a look at this fantastic cost-of-living index from The Economist, which pegs New York at 7.

The Economist Cost Of Living Index 2015 - cheapest international city in the world
The Economist Cost Of Living Index 2021

As you can see from the chart, San Francisco is nowhere to be found! The reason why is because San Francisco is one of the cheapest international cities in the world. Well actually, I did find San Francisco rank at a lowly #34 after looking hard enough.

Here's another Cost Of Living Index from The Economist. Once again, notice how San Francisco is not even on the map. Yet, San Francisco and the Bay Area have major companies that pay very well. We're talking Google, Apple, Facebook, Twitter, Clorox, and more.

Cost of living index around the world - The Economist

For those of you wondering what is the definition of an “international city,” let's put it out there.

An international city is a city where there are large amounts of foreign office hubs, foreign visitors, wealthier immigrants, and foreign property owners. An international city faces a foreign demand curve of buyers.

The pandemic has throttled foreign buyers of U.S. real estate since 2020. But expect foreign buyers to gobble up U.S. real estate once borders reopen again. The wave is happening in 2023.

An easy way to think about an international city is to ask yourself whether you'd consider vacationing there. New Delhi? Absolutely. Karachi or Fargo, North Dakota? Not so much. San Francisco, Los Angeles, Seattle, Boston, Washington DC, and New York City are international cities of America.

Exploring Honolulu, Hawaii

To prove that San Francisco is one of the cheapest cities in the world, let's go explore other cities.

In early 2014, I was thinking of renting out my house, increasing passive income, and moving back to Honolulu to be close to my parents. I went searching every weekend for five weeks for property, and here's an example of what I found. This isn't even the most expensive of the bunch.

Honolulu is not the cheapest international city because there aren't high-paying jobs
Honolulu Property
Kahala Home

This house is at 4657 Aukai Avenue in Kahala, Oahu. It's a great neighborhood close to the Waialae Country Club where I could play golf in the morning, get some lunch in the afternoon, take a nap on the beach, and then play tennis after 4pm when the sun isn't too hot. Not a bad life right?

With 4 bedrooms, 4 bathrooms, 3,430 square feet of living area, a pool, and 0.25 acres of land, the house would be just perfect for a family of four and the occasional guest. It's certainly not one of those mega-mansions by any means.

What About The Price?

Here's the problem. The asking price is $3,475,000! I mean, seriously? How the heck is the normal person supposed to afford this home? There are simply not enough jobs in Honolulu for locals to pay so much.

I worked in finance for 13 years, saved 50-75% of my after tax income, and have the largest blog in my zip code that starts with the letter “f,” and there's no way I could afford this home. I'd have to come up with a $2,475,000 downpayment to get to my ideal mortgage amount.

Even if I could come up with a $2.475 million downpayment, earning $150,000 a year in passive income just barely comfortably covers the $4,000 a month PMI mortgage payment if I were to have kids. You might be wondering why I wouldn't just get a job then?

Here's the thing. In 2023, this house hasn't changed in valuation! Not only was the house expensive to buy, it also didn't provide a proper return. In contrast, San Francisco home prices continued to go up. If you were long SF property, San Francisco now has become even cheaper to live in.

I had to look on.

Related: Retiring In Hawaii: The Pros And Cons

Exploring New York City, NY

Despite New York City being grey, cold, or muggy for half the year, NYC is still the best city in America for the other half of the year. The food, the entertainment, the people, and the buzz are incredible!

My biggest regret was not buying a $730,000, two bedroom, two bathroom, double balcony condo at 24th and Madison with a view of the Chrysler building in 2000. The 1,300 square foot condo is probably worth much more today. But how much more, I'm afraid to know.

Undeterred and always hopeful, I went looking online and offline for my retirement condo in NYC and here's what I found.

Expensive Condo

A 569 square feet West Village condo at 366 W 11th St #10A with a deck for $1,445,000. I like the indoor/outdoor living, but come on. $2,539 a square foot is outrageous for what it is.

I'm a middle-aged man who doesn't want to go back in time and live like a college student. 569 square feet is tiny, especially if there will be two or more people inhabiting the space. Let's keep looking.


Expensive Brownstone

I was thinking to myself, why not try and find a home in Manhattan that is similar in size and in location to my home in San Francisco. A fair trade in property, despite the inferior weather of NYC sounds like a decent goal.

I couldn't find a 2,400 square foot brownstone in Manhattan. All of them were at least 3,500 square feet with four stories. Fine, I'm happy to entertain bigger properties if the value is there.

Here's a 3,500 single family home at 112 Washington Pl in the West Village. One big problem. It just sold for $11,000,000 million! The brownstone is gorgeous, but come on Gina. That's $3,141/sqft and where am I supposed to park my lady-killer Honda Fit? On the street? Ridiculous. Look how skinny the lot is.

New York City truly highlights how San Francisco is one of the cheapest international cities in the world.

NYC Brownstone - NYC is not the cheapest international city
Looks like my house in SF, but with one more story and no parking
NYC Brownstone Property - NYC is not cheapest international city
High ceilings with a nice deck out back for $11 mil

Luxury Condo With View

OK, now I'm thoroughly depressed. There's no way I can afford $11 million fo a brownstone. New York City is definitely not the cheapest international city in the world. Although, prices have been coming down post pandemic.

Forget a single family home in Manhattan. Let's go back to looking for a condo in a great location. I've always wanted to live near Central Park. Having the combo of a big city plus nature would be incredible.

I found this great 2,021 square foot, two bedroom, two and a half bathroom condo at 15 Central Park West #2E. The size is perfect and it has a nice terrace, but I was hoping to have a third bedroom in case I have guests or kids. Oh well, I'm willing to compromise if I can save a little bit of money. Unfortunately, the asking price is $8,990,000 or a whopping $4,448 a square foot!

NYC Condo

Thoroughly depressed, and still amazed by how often people say that San Francisco is the most expensive city in America, I decided to give up my plans of moving to Honolulu or New York City. New York City makes San Francisco look so cheap.

PS: New York has six ZIP codes among the Forbes' top 10 most expensive zip codes list. Long Island’s Sagaponack 11962, in the town of Southampton, grabs the No. 2 slot after Atherton, CA at #1. Number 3-5 are New York City ZIPS: Lower Manhattan’s 10013 (No. 3), the Upper East Side’s 10065 (No. 4) and 10075 (No. 5).

How About Paris, France?

Maybe Paris is the cheapest international city in the world. I spent a week in Paris in May 2016 and San Francisco is definitely dirt cheap in comparison. Notice how Paris ranks #5 in The Economist's list of most expensive cities above.

I stayed at a Junior Executive Suite Deluxe at the La Reserve Hotel for a week and it costs 1,700 Euros a night. That's about $2,000 a night.

The hotel room is nice at ~500 sqft, but $2,000 a night seems a tad much doesn't it? In San Francisco, you can stay in a similar size suite for about $500 – $700 / night. Not cheap, but 70% cheaper than Paris!

La Reserve Hotel Paris, junior executive suite for about $2,000/night
La Reserve's junior executive suite deluxe for about $2,000/night
La Reserve Hotel Rates - Paris is not the cheapest international city
La Reserve Hotel rates. Guess they kept the prices the same from 2015

Food is super expensive as well. It didn't matter where I went, each meal cost $80 for two at a minimum for dinner. Below is a light dinner we had off the Champs Elysees for about $74. The French Onion soup cost about $28, the Caesar Sald $31, and the beer about $15.

Expensive French Food at Le Fouqete's

Why Is San Francisco The Cheapest International City?

Price to income and price to rent charts for global international cities

Maybe people are afraid of large earthquakes, which happen once every 25+ years. I would rather chance having a large earthquake than having hurricanes or tornadoes every single year. Or maybe people believe SF is so expensive because the media has successfully scared away people at the margin.

For 13 years, I had no idea there were homes with ocean views in San Francisco for so cheap until I decided to actually go look. San Francisco residents are more financially satisfied. They don't require as big of a net worth to feel wealthy. And this is partly due to a beautiful environment, nice homes, more diversity, and more opportunities.

You would think that with amazing weather, world class universities in Berkeley and Stanford, huge companies like Apple, Google, eBay, Genentech, Facebook, Twitter, Uber, Lyft, AirBnB, Uber, Clorox, Chevron, SalesForce, Yelp, Yahoo, Levi's, plenty of VC and PE funds, and nation-leading low unemployment, San Francisco would be way more expensive than Honolulu and New York City.

But San Francisco is so much cheaper in comparison. You can buy a panoramic ocean view, 2,000 square foot, single family home for $2 million ($1,000 / sqft). Yet, you can still earn the same income, if not much more than if you lived in Honolulu or New York City.

Some might have thought me crazy for buying a fourth property in Golden Gate Heights. But I found it insane that prices weren't even $1,000 a square foot for properties with panoramic views back in 2014!

Job Opportunities Are Huge In San Francisco

Then there was this 26 year old guy who went to programming bootcamp and told the world he received a $250,000 a year total compensation package at Airbnb! Just look on LinkedIn or for jobs and you'll see plenty of $100,000 – $200,000 a year opportunities.

Six figure jobs are a dime-a-dozen here in San Francisco. One ad agency rep with only one year of experience moved to Netflix for $120,000. Not bad for a 24 year old right? Every single one of my 23 year old tenants makes over $150,000 a year given they work in finance and tech. My MBA grad tenant makes over $280,000 a year, if not much more based on her carry.

Even if there was a great house with views in Honolulu for $1.5 million, I wouldn't feel as comfortable spending the same amount of money there as I would in San Francisco because the job markets are so different. In Honolulu, I was thinking about working at Cold Stone Creamery for $10 an hour. At least I could hook my friends and family up with some free ice cream.

I could probably find a six-figure job in New York City in finance or internet/tech. But the problem is that New York City is so much more expensive than San Francisco that I would need at least a 50% pay bump to afford something similar.

Now there is a massive artificial intelligence boom, where San Francisco is ground central for all the largest AI companies like OpenAI, Anthropic, and Databricks. If you can't get a job in AI, then you should buy real estate in cities that are home to the largest and fastest-growing AI companies.

Buy San Francisco Real Estate

It's pretty evident that San Francisco is undervalued in terms of rent and property prices compared to other major cities in America and around the world. All you have to do is spend hours pounding the pavement and searching online to realize the truth.

The first picture in this post is a $8.9 million, 9,500 sqft mansion in Presidio Heights, San Francisco. This would be well over $25 million in New York City if such a place could exist.

Best Place To Buy Property In San Francisco 2020 - 2025 Map - cheapest international city

When you can earn the highest incomes in the nation and not even be included as one of the 100 most expensive places to live according to The Economist, you know you've discovered an absolute steal.

The key is to buy your slice of heaven before everybody locally and internationally find out. I fear what will happen when China's capital account gets liberalized.

I'm buying all the panoramic ocean view single family homes possible in Golden Gate Heights, the best area to buy property in San Francisco. There is a demographic shift towards living and working on the west side of San Francisco. As a result, I would buy as many single-family homes there as possible.

It is clear thanks to high incomes, San Francisco is the cheapest international city in the world.

Average Software Engineer Compensation Top Firms makes San Francisco the cheapest international city
Six figure jobs are a dime a dozen in San Francisco

Invest In Real Estate More Surgically

If you can't afford San Francisco real estate, then buy U.S. real estate. U.S. real estate is one of the cheapest developed country real estate. Foreigners know how cheap U.S. real estate is, which is why they are buying our properties.

If U.S. real estate prices ever got as hot as Canadian real estate prices, U.S. real estate prices would be up 70% more today! Yet, the United States has way more opportunities to build great wealth.

If you don't have the downpayment to buy a property, don't want to deal with the hassle of managing real estate, or don't want to tie up your liquidity in physical real estate, take a look at Fundrise, one of the largest real estate crowdsourcing companies today.

Fundrise has an investment minimum of only $10 and predominantly invests in Sunbelt residential and industrial real estate, where valuations are lower and yields are higher.

Real estate is a key component of a diversified portfolio. Real estate crowdsourcing allows you to be more flexible in your real estate investments by investing beyond just where you live for the best returns possible. For example, cap rates are around 3% in San Francisco and New York City, but over 8% in the Midwest if you're looking for strictly investing income returns.

Sign up and take a look at all the residential and commercial investment opportunities around the country Fundrise has to offer. It's free to look.

Fundrise Due Diligence Funnel
Less than 5% of the real estate deals shown gets through the Fundrise funnel

Private Real Estate For Accredited Investors

For those of you who like to invest in individual real estate deals, check out CrowdStreet. CrowdStreet focuses on real estate projects in 18-hour cities, those cities with potentially faster growth and better valuations.

With technology and the growth of work from home, I believe there will be continued migration to 18-hour cities. CrowdStreet is also free to sign up and explore. That said, you must do extra due diligence on every sponsor and build your own select real estate portfolio.

I've personally invested $954,000 in private real estate since 2016 to diversify and earn more passive income. The older I get, the more I love earn 100% passive income. Sunbelt real estate is a multi-decade trade we should benefit from!

Invest In Private Growth Companies

In addition, consider investing in private growth companies through a fund. Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment. 

One of the most interesting funds I'm allocating new capital toward is the Innovation Fund. The Innovation fund invests in:

  • Artificial Intelligence & Machine Learning
  • Modern Data Infrastructure
  • Development Operations (DevOps)
  • Financial Technology (FinTech)
  • Real Estate & Property Technology (PropTech)

Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!

The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. In addition, you can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments.

The Cheapest International City In The World is a Financial Samurai original post. As the real estate markets softens due to aggressive rate hikes, I'd look to buy San Francisco real estate at a discount. Long term, you and your children will thank you!

About The Author

91 thoughts on “The Cheapest International City In The World: San Francisco”

  1. Funny you say you wouldn’t consider visiting or vacationing in Chicago, as it’s consistently a top US destination. 30+ million visitors per year.

  2. This article doesn’t really account for industry differences in pay by city or state. A lot of people like to say that you make more money in a big city like San Francisco.. Depending on industry this may not be the case from a housing cost to income ratio. For example I am a Physical Therapist in Las Vegas, NV with total earnings of about 110-115K. Decent homes in good part of the valley are 300 – 350k. Lets compare to SF. Could maybe up earnings to about 120-130 but Las Vegas is one of the higher paying cities for Physical therapists because of demand. As you can see it doesn’t make sense in this example to barely earn more than I do in Las Vegas to move to a place where a shack is 900k…. Also people tend to compare things they can relate to. It’s all relative. Nobody really cares what things cost in other countries. The only thing we have control of as American citizens are what the costs are here.. This country also has a huge student debt issue that those other countries don’t have. Overall, If you are part of an industry where you can make > 200k a year in San Francisco then sure it would be a nice place to live. If you’re not then I don’t think it’s a move that makes much sense.

  3. Grasshopper

    I’m totally blown away that AirBnb engineers can have an annual salary of close to $300k! Most engineers I’ve known are in the $100k to $170k region with only ultra rockstars getting close to $200k. Then those that want to earn more jump into management, their own startup or the dark side – enterprise sales – to clear the $300k mark and above. Would love to know where you found these numbers?

    I agree with the premise of your article that SF is cheap. Coming from London I sold my teeny tiny (ex council) flat for $800k in 2016. I couldnt believe that I could get a cool 3 floor loft apartment+parking in the Mission for $1m.

    Personally I am jumping in ASAP as when the next liquidity event happens all bets will be off for everyone else. The other good thing about SF is that even if we had a 10% decline/crash there is so much liquidity sloshing around that others would jump in and pickup the slack.

    I just wish the local women would take a page from LA women, alas we need dreams.

      1. Grasshopper

        Okay a ton of RSUs. All of those businesses are sound so an engineer would just have to wait it out and put his faith that management will help them get rich ;-)

        But many of them dont have a $20k+ salary available today, its closer to $10k pretax and the RSUs *could* happen in the future.

        I have friends waiting for their own liquidity event at Mulesoft where they’ve been told an IPO is coming for the past 4 years – apparently this year is the year – but there are inevitably people who drop out of the rat race no longer driven to grind out 12 hour days.

  4. I really don’t think you live in the real world. Most people cannot afford these multimillion dollar properties you rattle on so casually about. The average income is only around $84K – before taxes. Most people I know struggle to afford even just to rent and have to live with multiple roommates or are pushed out to the East Bay. Most people I know in tech don’t make 6 figures. Actually, closer to $70K.

    I don’t get the sense you’re deliberately being dishonest, just that you’re more shrouded in perceptions that come from being in a certain socioeconomic group.

    1. What are your thoughts on why your real world is more real than my real world? I grew up in six different countries from ages 0 – 13 before coming to the US. I speak three languages, which helps understand the Chinese, American, and Hispanic customs. I’ve visited over 50 countries, most recently Cambodia, Thailand, S. Korea, Taiwan, and Vietnam last year, and Czech Republic, Austria, Hungary, and France this year. I’ve clearly seen how much more it costs to live in Vancouver, Paris, Hong Kong, London, Singapore, NYC (where I lived for 2 years) compared to SF.

      I worked $4/hour minimum wage jobs growing up, went to public schools all my life, and still drive for ~$20/hour (just gave several rides yesterday).

      As an investor, you’ve got to think ahead and think about the demand curve. Otherwise, how else are you going to make better returns? I personally feel SF is very undervalued as an international city with a huge amount of six figure jobs and a growing tech/internet industry.

      Why do you discredit my views? Why do you think your reality is more real? I’d love to know more about you.


      1. The real world is full of people who do not travel. While I understand your argument, that you have a cosmopolitan upbringing which gives you a worldly perspective, when CeeCee said he/she doesn’t think you grew up in the real world what he means is that living in 6 different countries before the age of 14 and having visited 50 countries in your life makes you part of the elite. Most poor and regular people, like me, think that a lot of rich people live in a bubble because they think their lifestyles are normal when in reality they are the 1% (or some tiny fraction of humans live like you). you have probably spent hundreds of thousands of dollars on airplane tickets alone, and this is not normal in our world. While I concede that you appear to have written this article for a super wealthy audience, the world of the super wealthy is not the real world, it is a perspective reserved for a privileged few who often cannot see the struggles of those living around them (who they frequently are exploiting).

        Now because you always ask people who comment about their personal lives, about me: I was born in Italy and grew up in Marin County, California, across the Golden Gate from SF so, if I know about one thing, its about people living in a bubble (including myself and you).

  5. I have totally bought into the media stories about how San Francisco is so expensive but I am looking on Zillow right now and see that you are right. A beautiful 1500 square foot home with ocean views is listed for just over 1 million. You can get a two unit building further from the coast for 1.25 million. I would rent out one unit for at least 1500 a month and live in the other. Considering the incomes in the area, the climate, and the amenities of the city I do agree it is a pretty good value.

    1. And not only that, $100,000 plus a year jobs are a dime a dozen.

      You can get part-time consulting gigs working 25 hours a week over $100,000. I know because I’ve done it and they just keep on coming. There’s so much demand for labor out here it is crazy. The media doesn’t focus on how much people can make in the wealth here.

  6. 1) SF is heavily rent controlled. Your cash flow will suck if you are not living there yourself.

    2) Tech salaries are cyclical. Many SF companies make no profits. Airbnb, uber, twitter, salesforce, facebook even make little to no profit compared to their market value. The market value they have at the moment is all based on future projections and not based on any tangible present earnings.

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  11. This is not a rational statement:
    “Surely, The Economist wouldn’t just inadvertently leave off the greatest, and “most expensive” city in America, would they? Of course not, although where the hell is Hong Kong?”
    How do you know? And what was the source of their data?
    Youre comparing apples to oranges. The logical comparison is AVERAGE INCOME TO AVERAGE COST OF LIVING.
    SF does not trump other places with that one. There are plenty of poor people in SF.

  12. I found this post beyond amusing. San Francisco is a very expensive city to live in by just about any measure. The whole idea of an “international city” is pretty dumb. And New York is an acceptable comparison but Chicago is not because of the weather?? Come on! Chicago and NYC have similar weather.

    1. I don’t think one can see Chicago now given the Omega Storm. An International City is all about attracting the FOREIGN DEMAND CURVE.

      Do you think foreigners from Nov – April are thinking, I must get me some Chicago property? No. Think how others think.

  13. Maybe this should be titled “The Most Economical International City in the World – San Francisco” because you take into account income earning potential, and it carries such a big weight.

    My friend brought up that, for example Berlin and Tallinn are much cheaper, international cities than San Fran. Unless these cities didn’t meet the criteria for international cities, it’s hard to prove him wrong.

  14. I think it’s because SF is small and feels pretty suburban – and it’s very isolated from Europe and Asia. (It’s a daunting 11-12 hour flight to get to either.) I was born here and live here now, but I lived in Paris and London for many years. Those cities are big cities, and much more international destinations. Paris gets nearly 30M visitors a year and I imagine London is similar! I love SF, but it’s a city where you need a car (hence hideous traffic that kills your soul and commuting from SF to Silicon Valley in a car is really not worth any salary!) and reminds me more of Boston, Seattle, or Portland than it does Paris or London. Those are huge, world-class destination cities. I like SF, but it’s definitely sleepy and a one-industry town.

    1. You do realize you are committing heresy here? You best be careful. You might get burned at the stake! It is forbidden to say anything which might be construed as “negative” about North Korea….. I mean San Francisco.

      The traffic is hideous. It was hideous 30 years ago. It’s much worse now. Mostly because the majority of folks working in the city, live in the suburbs, and public transit is so so (if available at all).

      I like the old San Francisco (pre-internet) better. I think it was more fun!

      Oh well….

  15. I really like all your articles. But, your numbers don’t make an international city.

    No one- NO ONE in Europe talks about San Fransisco in conversation. There are 3 cities: LA, NYC, and Chicago that you don’t need a state.

    If you say “San Francisco” you say- San Francisco, California. That is all.

    1. Maybe we talk to different Europeans? I visited around 10 European countries over the past three years and everybody knows where SF is when I tell them that’s where I’m from. But many have never been.

      If what you say is true, all the more reason to be bullish about SF because once the Europeans start “discovering” San Francisco and realizing it’s like some of the beautiful cities along the Mediterranean, but with huge wealth opportunity, SF will rocket in price. The Euro rich vs Asia rich will create a frenzy!

  16. I’m curious about the Hawaii bit, was their no chance at anything below the 3.5mm, you know maybe a bike ride further away for a couple million less? Is it possible to live with your parents for 6 months out of the year, I mean maybe ask them to build a guest house, just an idea.

    1. The average house price on O’ahu is under 800k. The house and neighborhood he used is literally where the richest people on the island live. You could go 20 minutes east or west and buy a house for under 750k in a middle class neighborhood.

  17. (Cont.)

    If you compare SF to HK, London, NYC, etc., APPLES TO APPLES, SF is not much cheaper! Sure, the heart of London is expensive, most of Manhattan is expensive (not way uptown)…but other areas of London, and other NYC Burroughs are nowhere near $1000+ PSF.

    Also, SF is much smaller, so most of it is prime, and expensive. You really need to compare the Bay Area to NYC inc. all the Burroughs. Same for greater London.

    1. Not sure how I’m not comparing apples-to-apples:

      1) Compared three prime locations in Hawaii (Kahala), San Francisco (Presidio Heights), and New York (Greenwich Village and Central Park West)

      2) I live in SF and go to open houses for fun at least once a month. I go to Oahu 1-3X a year and look at open houses. And I go to NYC 1-2X a year and also check out property.

      3) I’ve lived in SF, Honolulu, NYC, and visited a majority of the cities on The Economist’s list. The Economist’s list is just ONE list. Here’s another list from the Cost Of Living Index which puts SF below NYC and Honolulu as well.

      I’d love to know about your property and living experience. Where do you own?


      1. Because you can find plenty of nice places in Manhattan for $2000 psf. Same as a nice condo in pac heights. Yes in general Manhattan is pricier and there are less SFH’s, but there is plenty of price overlap with SF. Also, lower Manhattan is cheaper, as well as Harlem.

        And someone else gave you a $700k SFH example in Hawaii.

        I agree that SF has solid growth potential wrt intl city status, and the tech industry plays a large roll, as does asian money coming here to purchase assets and RE. But it’s still is, and has been for decades, a pretty expensive city (maybe not the most expensive, but always in the top tier.) Since the tech industry became such a powerhouse the last two decades you could say that SF has become less of a prime niche city and more of a global destination.

        1. The $700k example is not apples to apples. I thought that’s what your pain objection was? I’m comparing across tier 1 properties.

          Please share with me your ownership and living history. Id love to understand more of where you are coming from. Do you live in SF now? Have you lived in Honolulu or NYC?


  18. Claiming SF is cheap because it’s not on the economist list is a ridiculous argument! How do you know the economist didn’t consider SF as part of the pool? Example, Monaco is expensive as hell and isn’t on the list either. And propping up a home that you like in golden gate heights as the primary example is also misleading. Yeah it’s an undiscovered little pocket, but anecdotal only. SFH’s in SF average closer to $1200-1500 a sq ft if you average most good neighborhoods. Just like I can get a cheaper place in Manhattan way up the avenues, that doesn’t reflect the average price in the established neighborhoods.

    You really need to compare apples to apples.

  19. Hi Sam,

    Where is Bangkok on the list? It is a cheaper city and I see more white faces on the streets of Bangkok than when I walk around in some parts of the Bay Area…


    1. Great question! Where is Bangkok and Kuala Lumpur on the list? Two of the cheapest cities I’ve ever lived in.

      They don’t make the cheap list because this list I’ve got is based on wealth-creating potential. Job pay is low in Bangkok and KL, and the wealthy entrepreneurs all seem to be firmly entrenched with the government. Hard for any immigrant to come in and create their own fortune. Whereas in SF, I feel anybody with smarts and determination can make a very good income or create something valuable. Thoughts?

    1. Hi Jon,

      Definitely OK! Thanks for sharing my work there. I’m supposed to do a podcast at BP one day. Just need to get around to filling out their 2-page questionnaire.


  20. I found this article very interesting. I had always heard how outrageous prices were in San Fran but they look positively heavenly compared to New York. I guess it really depends on your yearly income in terms of affordability. If San Fran really has that many great jobs, then I guess the sky is the limit with the quality of life you can find there.

    Where I live, you can get 3 bedroom houses for less than $100k so affordability is off the charts!! The only thing is that incomes tend to start much smaller here versus other big cities.

  21. As a O’ahu native, You’re comparison to Honolulu is a bit off. Kahala is one of the richest neighborhoods on the island. There are plenty of single family homes that are much cheaper and still in desirable areas.

    1. I’m trying to do like-for-like comparisons of the neighborhoods I like in San Francisco, to the neighborhoods I’d live in Oahu, and New York City.

      Any other suggestions for Oahu? Hawaii Kai, Diamond Head, and Wai’alae Iki seem nice.

      1. I’m not real sure what the neighborhoods that you like are actually like in San Francisco (I’ve never been). I can tell you that Kahala is where most of the 1%ers and old money live in Hawaii (along with a couple other places). Hawaii Kai has a lot of upper middle class families as do some towns on the Windward side. If you’re doing a comparison of the richest areas in each city, then I guess you’re on point. Although, most of the housing on Oahu is nowhere near that expensive.

          1. Yes, Kaimuki is a nice area. Close to downtown and Waikiki. Close to a few good private schools (most people opt of the public school system in Hawaii). Also close to the University of Hawaii campus. It’s centrally located, not too expensive, and close to everything so you don’t have to deal with the terrible traffic. I have friends who live in Ewa Beach and Kapolei and spend at least an hour each way when they commute. The houses out there are newer and the communities are planned so it attracts a lot of families. My friend bought a 5 bedroom duplex in Kaimuki for 700K. It needs to be updated but you get a clear view of the ocean and diamond head out the kitchen window. You can update a house, but you can’t update a view.

            1. Sounds like Kaimuki is the best value in town then! :)

              I’m a fan as I’ve been going back there for 37 years.

              The views, oh the views. Where do you live?

              I think I would shoot myself if I had to commute from Ewa Beach or kapolei.

  22. Maybe SF Real estate has a built in discount due to its volatility, much like the volatility of the valuations of main employers outlined in this thread. What if many of these “momentum” or “social” companies and their respective stocks fall out of favor. Stock price goes down, layoffs occur, pay gets cut. The chances of this happening for the core tech SF companies are higher than most other industries. I work in NYC and live directly across the river. You can buy a 2400 square foot brownstone on my block for 1.8 million and commute in the city. Sure, you dont have Manhattan zip code, and thats what important…but my point are there are options if you love/work in NYC. FS, using 15 CPW as an example is a bit extreme!

  23. Have you tried looking for comparable condos in Brooklyn? It’s where all the young, dynamic people have gone, and New York is bigger than just Manhattan.

  24. With one million dollar or even less to spare, one can comfortably retire pretty much anywhere in SE Asia. Cheaper cost of living, happier people, better food, etc.

  25. Stefanie @ The Broke and Beautiful Life

    I think to be a six figure earner in San Fran you need to have very specific expertise- obviously tech is a big one. Because NYC is such a centralized spot for SO many industries, there are not only a lot of high income opportunities, but those opportunities cover the spectrum of careers, which is why I think so many people flock there- from finance to theatre (or both in my case :) )

    1. I love NYC. I just think the city hasn’t gotten so expensive that it leaves more people with broken dreams and empty wallets than any other city.

      Unless you are the best of the best, it is super tough to make it in NYC.

      And to actually buy a nice place to live seems impossible for most.

      SF has every other industry as well, just in a smaller scale.

  26. I think where I live (SLC/Park City area) meets your definition of an “an international city”, albeit a small one. We definitely attract tourists for skiing and mountain biking. There is a sufficient amount of culture available in SLC. I got lucky with my job, but there are other opportunities out there, just not as bountiful as somewhere like SF. And where else can you live 30 minutes from a real airport, 10 minutes from fantastic skiing, no commute to bike trails and, $1m still buys you a large, beautiful home with mountain views? Nowhere in the continental US!

    1. Rumor has it that South Bend has been secretly declared an “international city.”

      South Bend was found to have an airport, inhabitants whom were born in foreign lands, and sushi bars!

      Go Irish!

  27. I agree with you that San Francisco property is very cheap compared to other international cities. To think that Mumbai, India is more expensive than SF is crazy, but it’s true. I was in Colaba the other year and the prices for property are over $1,200/sqft.

    Manhattan is definitely way more expensive, as the examples you have demonstrated. It attracts the Russian and European big money. But as Asia gets richer, so will the West Coast cities like SF get more expensive and catch up.

  28. I think it just depends on what you’re comparing it to. Compared to the Midwest, San Francisco appears to be an incredibly expensive place to live. Most of the high earners in San Francisco may not think it’s that overpriced, but people who work regular jobs probably struggle to afford it.

    With that being said, you are spot on about Manhattan! The median housing price in Manhattan is almost $1 million now. That’s insane. And like you said, it’s cold and miserable there a good half of the year. No thank you.

    1. Of course there is Indianapolis in that article! Nice. lol

      Things are expensive and cheap for a reason.

      SF is more expensive than most cities in America, but that is b/c wages and wealth generating ability is much greater as well.

      You can only cut costs so much to get rich.

  29. There’s no doubt that if you work in Tech, then San Francisco is the best place to maximize absolute earnings. If you leave really cheaply, then it can be a great place to maximize net earnings as well.

    But, if you want to live a middle class lifestyle with good schools for your kids and a backyard… then the cost of SF vastly overpowers the increase in earnings. These are the folks that are moving from SF to places like Portland, OR and Austin, TX. Sure the earnings take a 10-15% hit in earnings, but the cost of living is so much less that they end up netting a lot more.

    2 of my good friends made the SF to Portland move in the last 6 months. Both report that the Portland tech scene is hot and that good engineers are making nearly what they were in SF. Seems pretty tempting.

    1. Portland is dirt cheap, but the amount of high-paying jobs is minimal compared to SF. They can’t hire enough people in this city.

      Also, I really like moderate weather that doesn’t rain so much, that isn’t as dreary.

      Portland is a nice city. I just thinking lifestyle is much better in SF.

  30. Interesting article. Looks like comparing SF to other major cities around the world makes it seem cheap, but you really have to be in the right industry to make it there. There are many other MUCH cheaper towns in the world so if you’re saying that SF is the 10th most expensive city in the world and comparing it to the Top 10, then it certainly does look cheap.

  31. You are not making apples to apples comparison. San Francisco is only 850,000 people compared to 9 million in NYC. Heck even San Jose has over a million people. Also, all the employers you mentioned are in San Francisco Bay Area not in city of San Francisco. Apple- Cupertino, Google- mountain view, Facebook- Menlo park, oracle- Redwood city, eBay- San Jose, Cisco – San Jose, Chevron – San Ramon, yahoo- Sunnyvale, Genentech – south SF (which is really not SF), Chlorox- Oakland. There might be a few employees who might be commuting from SF to all these places, but they very few (google buses not withstanding). In New York all the multi millionaires and billionaires are concentrated in a small area ( upper east side etc). In Bay Area there are many pockets where wealthy people reside… Apart from SF city there is Artherton, los altos hills, portola valley, Palo Alto etc. While I love SF, the only time I visit if I am going with visitors from elsewhere or have some conference…
    And you are right about Mumbai… SF is a much better bargain. The only thing that prevents me from buying more real estate in Bay Area is the fear of EQ… The recent one in Napa was so scary… Not sure if you felt it, but I woke up due to the jolt and was ready to pick my son and move under a table!

    1. If you get scared next time about some ground movement, feel free to e-mail me Sunil.

      Why is it that one can’t compare cities of different sizes?

      Yelp, LinkedIn, Twitter, DropBox, Box, are here in SF.

      1. As I mentioned in earlier comments, I have to agree with Sunil. If majority of the bay area’s industries, top universities, employers, all were concentrated in SF, then comparing SF real estate listing with Manhattan would be an apples to apples comparison. Linkedin is headquartered in Mountain View and these high tech companies, while providing an important services, are not movers and shakers in the finance and global economy. Wells Fargo which is headquartered in SF has far more significant role in U.S. and global economy. With that said, I do like SF a lot and if I can afford a single family house in Pacific Heights, Sea cliff, or the Marina, I’d be there in a heartbeat even if I had to commute over an hour to the South Bay

  32. Just what is an international city exactly?

    San Francisco is a very nice city but it only has a population of about 850,000. That is not really on the same scale as New York City.

    There are only three truly global cities in the United States and these are New York, Chicago, and Los Angeles. These three cities do the greatest amount of import/export and related business.

    San Francisco is more of a niche city, comparable to Boston. And Boston is also very expensive.

    And that is my two cents!

    1. I would consider DC to be the most important city in the world even though it may not be considered a global city by traditional definition. Any decision the U.S. government makes has impact across the world. During financial crisis, even the NY bankers who I previously thought rule the world had no choice but to go along with government’s plans.

      1. People do make the argument that DC is a global city. It certainly has strong global influence.

        But DC is really a “one industry” town: the US government. A global city needs to have a huge import/export business and the associated diverse businesses which come along with that. Global cities also have huge dense populations. I was in DC this past summer…. It certainly doesn’t feel global to me. And DC is not really a transportation center as New York, Chicago, and LA are.

    2. An international city is one in which has highly desirable features that attracts an international demand curve of vacationers, buyers, and residents.

      Chicago isn’t on the list b/c despite the cheap price, it’s too cold for half the year.

      An easy litmus test is this, “Where do people go to vacation?” San Francisco and NYC are always up there.

      1. So your criteria is that it is an international city if it is considered a common vacation destination?

        That’s fine. But anyway, you were comparing San Francisco to New York City. Not really even closely comparable.

        I would bet that the vast majority of vacationers are thinking about Los Angeles when considering a trip to California (I know I normally do).

    3. SF is definitely an international city. There are tons of Chinese and Asian property buyers and so much of what we use on the internet comes from SF and the SF Bay Area.

      I would consider Chicago to be a mid-tier, domestic city. What comes out of Chicago? I know there is the Sears Twoer, but what else?

      1. Sam II?

        Chicago is not in your article, so I don’t know why you are bringing it up?

        Chicago is the transportation center of the United States. If it came by rail, truck, or airplane; there’s a good chance it came through Chicago.

        In regards to San Francisco; I’m not sure having a few Chinese people and some internet companies is really all that global. A city needs a huge population and diverse industries to be a legitimate global city.

        The majority (the real serious stuff) of computer/software engineering is done in the South Bay. Not San Francisco. San Jose actually has a larger population. So maybe you should be discussing San Jose?

        San Francisco does have a pretty good tourism industry, and the financial district has some finance/accounting/lawyering opportunities. But it’s small city. Only 46 square miles. Last census: 812,000. Not exactly global.

    4. Are you kidding me with San Francisco not being a international city? People from all over the world visit the city as tourists and there are lots of international buyers of property from all over the world. SF is listed on pretty much all global city surveys. It has Chinatown, Japantown, North Beach, and etc. It is world known. The true US global cities are NYC, LA, SF, Chicago, Miami, Washington DC, and maybe a couple others. Those cities airports also have the most international travelers.

  33. I know the average is far lower, but I wonder what it’s like for the oil major workers in places like Houston. Between big oil jobs in engineering and finance, as well as bankers and energy trading, it’s hard to imagine there aren’t some super wealthy guys coming out of Texas. Imagine making 70-90k as an entty level engineer or banker while having living costs of $1k per month and no state taxes.

    This makes me s little envious.

    1. The cost of living in Houston is growing at a rapid pace……

      Houston has one of the fastest growing economies in the world right now. NYC had the most people move to the city in 2013, Houston was 2nd. Townhomes in the city now start around $800,000 for new construction (2400 sq ft). 4 years ago, you could find them at $400,000 (new construction). The cost of living has risen in Houston (food, real estate, etc.)

      I travel to NYC often. 2 weeks ago I was in West Village having dinner at a 4.5 star restaurant (According to Zagat). The food prices were exactly the same as a comparable restaurant in Houston.

      Property taxes are 3% of the value of the home in Texas, so no state income tax kind of off-sets the higher property taxes.

      1. Hmmm, $800,000 for a 2,400 sqft townhouse in Houston does NOT seem like good value anymore. Hope you are long housing there!

        The property tax of 3% is pretty outrageous compared to 1.17% here in SF (CA). We also have Prop 13 which keeps our property tax indexed to our historical purchase price + an inflation index. Helps out 10+ years down the road.

        1. Houston is not the cheap city it was 10 years ago. Housing has jumped quite a bit with the energy economy taking off. But Houston is prone to over expanding (no zoning) during the good years. And with oil dropping, the Houston economy may see some slack. A lot of the increased housing price is due to the cost to build. It is very hard to find good labor due to all the construction. I expect Houston housing prices to either come down or taper off and go sideways for a while. That will not be true in the more desirable locations which will likely continue to see some appreciation, but there are still many parts of city where housing is affordable.

        2. I was once in Houston for a few weeks during September for work and it was unbearably humid. I was staying at a hotel in the Galleria and I don’t think I left the complex more than a couple of times because it was so stifling outside. That is not the quality of life I would choose to live in! People seriously undervalue the temperate climate of California when comparing it to the rest of the country. Like nice weather is just a perk instead of a huge factor.

  34. Steve@EscapeVelocity2020

    Too many ads to read on my phone, but there’s no way any high state tax CA city can be called inexpensive. I agree with the last comment, make your fortune in a no state-tax place like TX or, better yet, no federal tax either, like Dubai. Then you are free to put a tax residence there and live or travel in places where others are paying the taxes and high real estate costs.

  35. SF is much cheaper than NYC, but they’re not fair comparisons since NYC is a much larger city. Comparing Boston or DC with SF is more appropriate to me. The cost of living index also takes into account other items besides housing such as groceries, dining out, utilities, etc. I’ve found the price of these items are at least two or three times SF prices in Oslo, London, Zurich. Even though housing costs are higher than SF, I didn’t find these everyday items in Singapore, Tokyo, Shanghai, or Hong Kong to be very expensive at all compared to SF. Anyhow, I think the recent uptick in housing in SF area has been driven up by overseas buyers. Personally, I don’t want the housing to skyrocket compared to incomes in SF area even though I’ll personally benefit. I want my kids and other young people to have an opportunity to buy a home also without having to move out of the area. Many people in SF rent and live with roommates even with six figure incomes while they’re young in order to strike it rich, but many won’t. Once they rich their mid 30s or 40s, I doubt they’ll want to live such a lifestyle.

    1. Can you elaborate on the argument why a smaller city can’t be compared to a larger city if everything is in place?

      I would argue that SF at 850,000 people is even MORE desirable due to less over crowding on the streets and at the restaurants. And it’s also more desirable b/c not every person has found out the secret to living here yet.

      1. The topic of international city is subjective I suppose, but at least to me, SF bay area can be considered an international region as Silicon Valley, its universities, and other industries you mentioned in your post has great importance to the world. However, those employers, industries, and universities you mentioned are spread out throughout the SF bay area and the majority of the people who work in those industries do not live in SF or work in SF. I think Salesforce maybe the largest private employer in SF with maybe around 4000 SF employees max. NYC, specially Manhattan where you compared the real estate values with SF listings, is different to me since the multinational finance firms are headquartered there, many of its highly compensated employees actually work there in Manhattan, and those who are rich enough actually reside in Manhattan in much greater percentage of the overall regional population. Since Manhattan is so much smaller in size than SF bay area with disproportionate of the regions wealthy wanting to reside in it, of course the real estate values would be much higher than SF.

        Compared that with SF bay area with its proportion of the regions wealthy folks much more spread out through the entire bay area. There are many super rich people in Marin County, along the Peninsula, South Bay, and to the East Bay hills who like to visit SF occasionally on weekends, may even own a weekend condo or other private residences, but the regions wealth isn’t anywhere nearly just concentrated in SF compared to NYC.

        I don’t doubt SF real estate values will rise over time, but I doubt it’s cheaper now compared to other “international” cities because don’t know how great lifestyle here is, which by the way is also subjective opinion.

        Finally, I wouldn’t consider Las Vegas to be an international city either even though many people vacation there from all over the world, have properties there, even reside there, and is well known. From your writing it’s clear you love SF very much, thus maybe you’re a bit more biased towards SF compared to other people.

        1. This was spot on. And I would say the same. Your articles do reflect a bias for SF. No doubt SF is great but I always see a waging war between SF and NYC on this blog. For people who are in fashion, marketing, brand management along with some other nyc oriented careers, you can’t be anywhere else. NYC is your home and any other city like SF can never be. Besides tech, you dont have as many options in SF. No one dreams of making it big in SF unless you are in tech and maybe finance. And these jobs that make well over sIx figures are just not handed to you, you have to be from an elite school and exhibit something great especially if you are not tech. It just doesn’t happen for the above average person. Seems to me that SF salaries are inflated if a 24 year ad rep is making 100k. How long will this sustain? Might be the what “wall street” used to be 10 years ago and then bam.

          And the way you talk about buying million dollar properties is almost like buying cars, but very few people have that kind of disposable income. Unless you are only aiming for the 13% of America that does make 6 figures and even then there is such a huge variation in those 6 figures.

          I like SF, but most of the wealth is distributed because sf’s high earners lie in San Jose, Santa Clara and so on while in NYC, most of the wealth is concentrated as Josh mentioned. If I were to buy a vacation home why would I not buy in SD significantly cheaper and more relaxing with the chill vibe just like a vacation home should be.

      2. SF city is not 850K, that’s the whole metro area. SF city is very crowded and dense event though the average apt buildings are only 2-3 stories. In Manhattan the apt buildings are 10-30 stories. Parking is very bad in SF. SF is 49 square miles but most folks are crammed into 9 square miles. Manhattan island is 34 square miles with folks crammed into all of it. NYC is much much larger. 8 million in 300 square miles.

  36. I think I’ll make my fortune in Texas and then maybe move to California. Since visiting Southern California as a kid, I’ve always loved it.

    Also, living close to NYC and visiting there often enough, there’s no way I’d ever want to live there. That sort of city living just isn’t for me and certainly isn’t what I have in mind for my kids.

    1. With wages so much lower in Texas, can you more easily make your fortune there?

      I think it’s much better to make a lot in a more expensive city, jump into an ecosystem conducive to wealth, and THEN retire like a king in Texas.

      1. I think wages depends on the industry. For high tech and finance, Texas isn’t the place to be. However, for energy industry, Texas is the right place. I know few people who work in those field in the Houston area and make major bank.

  37. recently-moved-to-sf

    absence of evidence isn’t evidence of absence. Just because the economist doesn’t display it doesn’t mean that the cost of living is low. Check out this report: .

      1. His article debunks your argument. Brooklyn NYC is the same price as SF. Manhattan is higher BECAUSE THE AVERAGE NET WORTH, wealth AND INCOMES/salaries ARE much HIGHER! You forget that NYC is 5 boroughs (sub cities). Kind of like Oakland, Berkeley, San Mateo, Daly City, SF all in one metro area. The high paid tech jobs are in Palo Alto and surrounding cities, etc. outside the SF metro area.

        1. That site is BS. It says 6 Truckee-Nevada County CA 151.7 is higher then
          7 Orange County CA 145.9 AND Los Angeles AND Chicago?! HUH? Truckee and Nevada County CA are small towns and rural country land. Hardly expensive. Chicagoland and LA County are VERY expensive!

          1. uh, Truckee is very expensive. Its an A+ international resort destination. Its not “rural country land”.

  38. I live two hours from Stockholm. In central Stockholm the price per square meter is 72,942 SEK which would be roughly $943 per sqft, if my calcuations are correct. So, $800/sqft doesn’t actually sound that crazy.

    1. You’re coming from one of the most expensive cities in the world, so of course $800/sqft is pretty good. But as we know, it’s always so difficult to find a nice quality property based on the average or median.

      In SF, the median house is $1.1 million, but you can’t get much for that!

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