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Slide Show | June 2011

1. New York

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© NYC & Company and Will Steacy

Coastal cities continue to dominate Kiplinger’s annual ranking of the most expensive places to live in the U.S. Four are in California, four are along the the eastern seaboard, one is in Hawaii, and one in Alaska.

Above-average housing prices are by far the biggest reason for the high cost of living in these metro areas. While the U.S. real estate market continues to struggle as a whole, home values (and prices) in these places remain exceptionally high. Rising energy costs, especially for gasoline and electricity, are also driving up living expenses along with the rest of the nation.

We ranked the 10 most expensive cities to live with data from the Census Bureau (metropolitan statistical areas only) and the ACCRA Cost of Living Index, which is assembled by the Council for Community and Economic Research. The index measures relative pricing of essentials such as consumer goods, housing, transportation, utilities and health care, to come up with a composite score for each metro area. The national average is 100. So a city that scores above 100 has a higher-than-average cost of living. Population and median household income data are from the Census Bureau’s American Community Survey.

Take a look:


1. New York

1. New York, N.Y.

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Courtesy of Massimo Catarinella

Cost of Living Index: 218

Metro Population: 18,912,644

Median Household Income: $63,553

Average Home Price: $1.14 million

The Big Apple tops our list for the second year in a row. Even though home values fell to their lowest point in years in 2011, sale prices here still far exceed the national average of $158,700, as reported by Realtor.org. On the upside, New Yorkers’ energy consumption ranks among the lowest in the nation, thanks to the heavy reliance on mass transportation. The metropolitan area includes White Plains and Long Island.

1. New York, N.Y.

2. Honolulu, Hawaii

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Courtesy of Brendel at en.wikipedia

Cost of Living Index: 171

Metro Population: 902,564

Median Household Income: $67,066

Average Home Price: $689,781

The picturesque views, white sand beaches and island culture come with an expensive price tag. The average home price in the Honolulu metro area, which includes Oahu, Pearl City and Ewa Beach, is significantly lower than in New York. However, the combined cost of food, utilities and transportation is the highest among the top 10. Since 2010, energy costs have gone up 8.5% because of rising prices for electricity and gasoline.

2. Honolulu, Hawaii

3. San Francisco, Calif.

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Courtesy of Mai Linh Doan

Cost of Living Index: 164

Metro Population: 4,218,534

Median Household Income: $74,876

Average Home Price: $808,481

A slightly higher median household income and lower utility expenses make the City by the Bay a bit more bearable budget-wise than New York or Honolulu -- but not by much. The average home price exceeds the national average by nearly $650,000. Rent averages $2,305 per month, nearly triple the national average. Gasoline prices are also burdensome: Regular unleaded gas, at $3.95 per gallon, costs about 26 cents more than the national average. The metropolitan area includes San Mateo and Redwood City.

3. San Francisco, Calif.

4. San Jose, Calif.

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Courtesy of Elf

Cost of Living Index: 150

Metro Population: 1,784,130

Median Household Income: $85,020

Average Home Price: $761,867

Median household income in the San Jose area is among the highest in the country. But residents here need those hefty paychecks to afford the over-the-top living costs. Housing is particularly high, as are expenses for utilities and transportation. The average rent for an apartment, at $1,578, is nearly double the national average. The metropolitan area includes Santa Clara, Sunnyvale and Saratoga.

4. San Jose, Calif.

5. Stamford, Conn.

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Cost of Living Index: 147

Metro Population: 892,843

Median Household Income: $81,114

Average Home Price: $606,742

Close proximity to high-priced New York seems to have a trickle-down effect of sorts on the Stamford metropolitan area, which includes Bridgeport, Norwalk and Fairfield. Average home prices are $550,000 less than in the New York metro area, but they're comparatively high to other metro areas. Apartment rents average $1,827 per month, and utility and health care costs are more expensive in the Stamford area than in number-three San Francisco.

5. Stamford, Conn.

6. Washington, D.C.

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Courtesy of Destination DC

Cost of Living Index: 141

Metro Population: 5,332,297

Median Household Income: $84,424

Average Home Price: $670,675

A strong job market -- not surprisingly, the federal government is the biggest employer -- allows for above-average incomes in the nation’s capital. The cost of living, however, is dear. Even as the broader real estate market declines, home prices in Washington are growing (see our 10 Cities Where Home Prices Have Held Up Most slide show). Rents, averaging $1,790 per month, are more than double the national average. The D.C. metropolitan area includes pricey suburbs, such as Arlington, Va., and Silver Spring, Md.

6. Washington, D.C.

7. Fairbanks, Alaska

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Cost of Living Index: 138

Metro Population: 96,843

Median Household Income: $65,121

Average Home Price: $438,225

It's not housing that drives up living costs here. It's everything else. Groceries cost one-third more than the national average, utilities are double, and health care bills are the highest of all the cities we ranked.

7. Fairbanks, Alaska

8. Boston, Mass.

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Courtesy of Riptor3000 at en.wikipedia

Cost of Living Index: 138

Metro Population: 4,513,934

Median Household Income: $69,854

Average Home Price: $418,775

Average home prices in the Boston metro area are the lowest among the ten cities ranked here. The costs of utilities and goods such as groceries, however, rank higher than in six other cities on our list. About one-half of households here consist of married-couple families, yet the median income is about $15,000 less than in San Jose, which has the highest on our list.

8. Boston, Mass.

9. Los Angeles, Calif.

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Courtesy of Basil D Soufi

Cost of Living Index: 134

Metro Population: 12,762,126

Median Household Income: $58,987

Average Home Price: $576,173

Home prices in the L.A. metropolitan area, which includes Long Beach and Glendale, are more than $400,000 above the national average; rent costs are more than double, at $1,830. About 30% of the metro area population is college-educated, yet the median household income is the lowest on our list. Other than housing expenses, average costs for groceries, transportation and health care are within 10% of the national averages.

9. Los Angeles, Calif.

10. San Diego, Calif.

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Cost of Living Index: 131

Metro Population: 2,987,543

Median Household Income: $62,901

Average Home Price: $555,768

The San Diego metropolitan area, known for warm weather, beautiful beaches and loads of military personnel, includes Carlsbad and San Marcos. Rising food and energy costs can put pressure on your pocketbook, and affordable housing is scarce. Apartment rents average $1,648 -- about double the national average -- and homes list well above the national average of $158,700, as reported by Realtor.org.

10. San Diego, Calif.

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