Wait ... what? Report says Minneapolis is 3rd most expensive city in North America

The Economist says that Minneapolis is a more expensive place to live than every other U.S. and Canadian city except New York and Los Angeles.

A new report from The Economist has identified Minneapolis as the third most expensive city in North America and the 25th most expensive in the world.

Yes. Minneapolis. More expensive than every other U.S. and Canadian city except New York and Los Angeles.

That includes San Francisco, where half a million dollars buys you a dingy studio apartment, and Washington, D.C., where the money flows like wine and the world's power brokers congregate. Even Chicago is reportedly slightly more affordable.

The Economist's Worldwide Cost of Living Survey was put together by its Intelligence Unit and compared in each location more than 400 individual prices across 160 products and services, including food, drink, clothing, household supplies, rent, transport, utility bills, private schools, recreational costs and domestic help.

The Economist gave us a little more information as to why Minneapolis ranked so high, with the city scoring particularly highly – 4th in the world, actually – for utility costs (well, we have to stay warm after all).

But in spite of this, we still can't help but be a little skeptical of the results.

Twin Cities vs. San Francisco

Compare Minneapolis with San Francisco, for example. The median house price in the Twin Cities is around $229,000 and the median household income $71,000, Zillow says. In San Fran, the median home costs $1.14 million and the median income is a shade under $79,000.

And the difference between the rental markets is gigantic. It costs almost three times more to rent an equivalent sized property in San Francisco compared to the Twin Cities, according to Expatistan.

And despite what the Economist Expatistan also shows the average cost of living expenses in different cities and Minneapolis/St. Paul's is lower than San Francisco in most categories, including eating out, groceries, clothes, transportation and entertainment.

The Twin Cities rank 15th in Expatistan's cost of living index in the U.S., nestled between Denver and Portland, which seems a bit more of a reasonable estimation.

However, perhaps consistent with what Economist found, the website lists the average cost of utilities in the Twin Cities as more than three times as expensive as San Francisco ($297pm vs. $92pm). But then again ... it hardly makes up for the rental disparity.

That said, it's not exactly cheap

That's not to say living in the Twin Cities is inexpensive.

The Minnesota Department of Economic Development's Cost of Living Index estimates the annual cost of living in the metro area for a married, working couple with one child at $70,080.

This compares to $46,908 for a family in the same situation living in southwest Minnesota. The cost of child care, property and taxes are particularly expensive in the metro compared to the rest of the state.

Housing supply problems have also added pressure to budgets, with Minneapolis' housing prices rising 8.2 percent in the last year, Zillow notes, while Rent Jungle says the average rental property price has increase almost $500-a-month in the past six years.

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