Cost Of Living in Silicon Valley #1

Over the past few months, I've received a couple of questions around what's the cost of living in Silicon Valley sent, presumably, by people contemplating a move here. Since I just went through collecting some of the relevant stuff together for tax purposes, I thought I'd do a post or two laying out the various components of what it takes financially to live in the Bay Area.

(For those of you who already live in the area, please feel free to post whatever additional information you may have based on your own experiences. Every little helps, after all, and I remember my own move here being something of a leap of faith, mostly because I didn't have any real idea of what that first pay check would look like or how much buying a house and having a mortgage would run us.)

Some basics: Silicon Valley is, from a living standpoint, a widely-spaced collection of individual districts, each with it's own set of pros and cons, few of which I'll discuss here just now. Depending on where you work and how much tolerance you have for commuting as to where you'll end up looking. Not much I can add to that other than to say some people are perfectly happy living in San Francisco and working as far south as San Jose, a distance of some 60 miles, while others will want to bike there in less than 5 minutes and avoiding all main roads. Let's start, then, by using those two places as end points for the sake of making an easy initial comparison.

Let's start at the top-most level: how does SV stack-up when set against other major world cities? The above graphic covers how New York compares with other places (in 2005 at least, & thanks to the Economist) and a quick poke at the Internet shows that San Francisco's cost of living index is approximately 80% of that in New York. That makes it about the same as, oh let me look here, Johannesburg, "car jacking capital of the world" .... which is interesting in itself.

So that's one end of the Valley taken care of, what about the other? Again, the interweb comes to our aid and it looks like San Jose runs about 70% of San Francisco in terms of cost. Hmm, not sure I completely agree (rents are the most likely driving this difference so it might actually be reasonable thinking about it a bit more) but whatever, it's a starting point.

Next up, we'll look at mortgage costs and housing. But that's for the next one ....