Cost of Living in Santa Monica, CA

An Overview of Cost of Living in Santa Monica, CA

Understanding the cost of living in Santa Monica can help future residents assess whether their current financial situation aligns with the expenses they will encounter. It enables them to plan for potential changes in their budget and lifestyle. The Santa Monica cost of living index is 264, which is 164% higher than the national average. The cost of living index is calculated by taking into account multiple categories, which encompass both the cost of everyday expenditures and larger expenses as well.

If you prioritize affordability when seeking a new place to live, Santa Monica may not be your ideal choice, as it ranks among the most expensive locations in the entire United States. A very small amount of areas exhibit a cost of living at least 20% higher than the national average, and unfortunately, Santa Monica falls into this category, which may not align with your preferences for a budget-friendly living environment.

Housing costs make up a big chunk of the cost of living in Santa Monica, and they usually eat into a large part of your take-home pay. Unfortunately, in this area, both buying a home and renting one costs 510.4% more than the average city. This includes stuff like home prices, rent, mortgage rates, and insurance.

Recurring goods and services expenses like haircuts, toothpaste, gym memberships and movie nights are a big part of your spending and make up 33% of the cost of living index. In Santa Monica, these items will cost you 16.2% more than what most folks pay, making it a bit more expensive to live here.

The substantial and relentless rise in grocery prices definitely warrants some attention. Over the past two years, grocery expenses have escalated by more than 10%. Having said that, the situation in Santa Monica is even less favorable, with grocery prices here being 12.2% higher than the national average.

What Do Locals Say About the Cost of Living in Santa Monica?

The most insightful perspective on a city comes from its residents. We recently surveyed 17 locals to gauge their perception of the cost of living in Santa Monica. The feedback revealed that 12% of respondents found the cost of living to be reasonable, with prices on the decline, while 88% regarded it as notably expensive with prices that continue to rise.

Is Santa Monica Affordable?

Is Santa Monica an affordable place to live? It's a good question and one that you might want to ask when considering any new city, as affordability can play a huge role in the decision making process. The cost of living index (which we covered above), as well as housing costs and income levels play a vital role in determining the affordability of an area. The median home price in Santa Monica is 686.2% higher than the national average, while the average monthly rent prices are 100.2% higher than average. The affordability of any location can also be influenced by median income levels. Santa Monica has a median household income of $98,300, which is 77.7% higher than the national average.

What Factors can Influence the Cost of Living in Santa Monica?

Taxes: Areas with higher taxes, including sales taxes and income taxes, can contribute to a higher cost of living. Paying more tax for everyday goods and services like clothing and food will result in higher costs, as will paying a higher rate of income tax. The general sales tax rate in Santa Monica starts at 7.25% and the income tax rates start at 1%.

Healthcare: Healthcare expenditures and insurance premium rates can vary significantly, contingent upon the particular city or state. Factors such as the accessibility of healthcare facilities, out-of-pocket expenses for doctor's appointments, dental care charges, prescription medication costs, and expenses related to specialized medical care can all have an impact on the overall cost of living. In Santa Monica, healthcare costs are 7.9% higher than the national average.

Urbanization: Larger, urban areas boasting abundant amenities and robust employment prospects often exhibit a heightened cost of living, driven by the increased demand for services and residential relocation. Consequently, this leads to elevated home prices and higher rental rates. In contrast, sparsely populated rural locales or regions marked by diminished demand typically offer a more limited range of amenities and experience slower job market expansion. This translates into a more affordable cost of living.

Where is the Data From?

The Santa Monica cost of living data you see above is sourced from the C2ER cost of living index, providing a practical and accurate means of comparing living expenses in urban areas. Updated quarterly, this index gathers data from over 300 independent researchers, covering more than 60 goods and services, in 6 different categories. These selections are made meticulously to represent a wide range of consumer expenditure categories. The weightings applied to cost differences are based on government survey data that tracks spending patterns among professional and executive households. It's important to note that while the C2ER index excludes data on sales or income tax rates, AreaVibes factors tax rates into the overall cost of living score for each region.