Why Is Seattle So Expensive? (Top 10 Reasons)

Located on an isthmus between Puget Sound and Lake Washington, Seattle is a beautiful city in the state of Washington.

With its incredible views, numerous parks, and a location near the water, the city is a natural choice for many people interested in living in Washington.

As many newcomers quickly realize, however, living in Seattle is expensive.

If they come from areas with a lower cost of living, then they may wonder what it is about Seattle that drives up its costs.

Here are 10 reasons Seattle is so expensive.

Why Is Seattle So Expensive? (Top 10 Reasons)

1. Housing Industry

As any newcomer and resident in Seattle will tell you, the housing prices in Seattle are insane.

The average price for a one-bedroom apartment in the city is over $2,000.

Houses typically start at around the $800,000 mark and only go up from there.

Recent trends have indicated that the prices decline the further you are from Seattle.

However, if you want to live inside the city limits, then you should expect high housing costs.

A few reasons are driving the high housing costs that make Seattle so expensive.

The first reason is low supply.

There aren’t that many houses or apartments in Seattle for sale or rent.

When one does open up, there’s a lot of demand for it.

That makes the sale or rental price skyrocket.

Sellers and landlords know that people will pay almost anything to live in Seattle.

That justifies their price.

People with the income to buy or rent take the offer.

Those who don’t have that kind of income have to look elsewhere.

Another reason housing prices are high is the small amount of land.

Since Seattle is on an isthmus, there’s only so far that it can expand.

There’s only so much land.

A lot of that land is also protected from urban and residential development.

Because of that, the city can’t build as many housing projects as its population needs.

Thus, the demand for existing houses and apartments only increases.

2. Transportation Costs

Housing isn’t the only thing making Seattle an expensive city to live in.

Transportation costs also make the city expensive.

Typically, those who live in Seattle end up paying a few more cents at the gallon than in other states.

The average price of gas in Seattle is $3.20 on a normal market day.

Auto repair costs also tend to lean higher.

A standard tire rotation will set you back more than $60.

Seattle does offer other transportation methods, but you’ll find that they also trend higher in pricing.

Taking an urban train will cost you anywhere from over $2 to $3.

Those fares are similar to their bus tickets, too.

A single one-way bus ride costs over $2.

Essentially, it costs more money to get around in Seattle.

There are a few reasons behind the higher prices.

The first is that, because it’s a city, Seattle may be trying to push its residents into greener methods of traveling.

They may want you to use electric buses instead of driving gas cars.

To encourage their residents to do so, the gas prices are slightly higher.

They may also prefer that you walk or ride your bike to work if you live close enough.

Another reason is that it can be difficult to transport fuel to the area.

Since they’re on an isthmus and in the far northern part of the country, if they import fuel, then it has to travel a long distance to reach them.

With only one way in and out of the city, thanks to the isthmus, transporting fuel can take a while.

Traffic congestion can keep them stuck on the highway for hours before they can finally reach their destinations.

Importing fuel is always more expensive than mining your own.

To make up for the cost, Seattle has to raise the price of gas.

That problem worsens when you have a large population like Seattle does.

Everyone needs gas when the supply isn’t always there.

Finally, gas prices are higher because wages need to be higher.

Auto mechanics, gas station workers, bus drivers, and other transportation or auto-related workers need more money to live in Seattle.

Thanks to the other costs of living, they need higher wages to live and operate in the city.

That means their own services need to be priced higher.

Altogether, it makes driving and getting around in Seattle more expensive.

3. Expensive General Goods And Services

Everything from a haircut to seeing a movie is also more expensive in Seattle.

The average price of a haircut is just under $40.

The average price of a movie ticket is over $14.

It costs more to buy common goods and to partake in common services in Seattle.

This, again, probably has to do with the high cost of living in the city.

Hairdressers and movie theater workers need extra money to survive in Seattle.

Without receiving a fair wage themselves, they can’t work or live in the city.

To survive annual taxes or even be able to reach their work location, they have to set their own goods and services at a higher price.

The high cost of living in Seattle is a vicious cycle.

Because it’s expensive, it continues to become more expensive simply to ensure that its residents can survive living there.

4. Sales Tax

Seattle doesn’t impose income taxes on its residents.

Instead, it uses a sales tax to fund its government and programs.

This means that when the tax season comes, Seattle residents don’t have to worry about filing their taxes with the city.

They still have to pay federal taxes, but the state, as a whole, doesn’t do an income tax.

Their sales tax is 8.8% which is then split between the state, the local government, and local transportation.

One way to look at it is to think about buying something worth $1,000 in Seattle.

The amount of tax that you’d pay on the product is around $90.

That money goes to the city of Seattle, the state of Washington, and other institutions.

For some people, the high sales tax could be enough to drive up their expenses to a high amount.

Since sales tax applies to every taxable good, if someone has a buying habit, then they could find themselves falling into debt on top of the rest of Seattle’s expenses.

Others who live more frugally or choose to buy their goods outside of Washington may benefit the most.

They don’t need to pay an income tax which could save them a good deal of money.

They can also mostly avoid the sales tax by making purchases outside of the state, too.

Those who don’t have that luxury, however, will find that buying goods in Seattle is extremely expensive.

5. Technology Headquarters

One of the reasons behind Seattle’s high cost of living is the fact that it’s a headquarters for both Amazon and Microsoft.

One of the things it’s known for is being a tech city.

This draws a certain demographic to it.

Software engineers and other tech-minded individuals looking to join either Amazon or Microsoft make their homes in the city.

Some consider it better than the stressful life in Silicon Valley.

It also draws other types of workers who are looking for blue-collar work.

Having both of these headquarters in the city generates a lot of jobs.

That also increases the number of workers and increases the population of Seattle.

As a result, there’s more demand for housing, goods, and transportation.

Many of the workers attached to these headquarters also make a significant income.

They drive up the price, too.

These headquarters continue to grow as well.

They’re always seeking more workers, which means more people coming to the city to work and increase the demand for housing.

While having a few large corporations in a city is good for the economy, it can also increase the cost of living.

Such is the case in Seattle thanks to the presence of Microsoft and Amazon.

It makes Seattle a more expensive city to live in.

6. Climate

Another big attraction of the city that increases housing costs is the climate.

Seattle has a reputation for deep winters, but it also has a reputation for incredible summers.

The temperatures remain temperate which means it’s always comfortable enough to be outside during the summer.

Many people want to live in Washington because of its incredible views, mountains, and forests.

It’s the sort of state that has something for everyone.

There are lovely beaches, thriving urban life, deep forests, and challenging mountain ranges.

With more people taking an interest in off-the-grid living and preserving nature, they’re looking at places that offer climate havens.

Washington is one of those places.

The natural place to live in Washington is in Seattle.

That’s because it’s situated close to several beaches and bodies of water.

It’s also close to numerous parks for hikers, campers, and nature enthusiasts.

It’s an ideal place for someone who wants to live a greener life or be more in tune with nature.

Since the forest is only a short drive away from Seattle, it allows their residents plenty of opportunities to get away from work and rejuvenate themselves in nature.

As climate change worsens, many more people may be looking for homes in climate havens.

That can increase the cost of living in Seattle even more as the demand for its housing continues to grow.

Because it already is attracting a lot of people because of its nature and climate, Seattle’s prices continue to increase.

7. Inflated Salaries

Due to the presence of tech headquarters, the Navy, and a large manufacturing business in Boeing, many people in Seattle have inflated salaries.

They’re paid a lot of money.

That also makes living in Seattle even more expensive.

Since some people have a lot of money to throw around, the city raises its prices to get as much of that money as it can.

Since it can’t tax them based on their large incomes, it does so whenever they make big purchases with their inflated salaries.

This also hurts those who don’t have such a high salary.

Blue-collar workers and minimum wage workers have to suffer the high prices without the income to cover them.

For them, Seattle may be too expensive a place to live.

Because a group of people receives high-paying salaries, they help set the prices of the city.

As a result, the city becomes too expensive for those making less than that established high income.

8. Restaurant Prices

Another reason that Seattle is expensive is its restaurants.

Those who live in Seattle take their food seriously.

Restaurants charge high prices for their meals for a few reasons.

The first is location.

To own a business in Seattle, you have to pay a lot in rent and property tax.

To cover those costs, the business has to increase its prices.

It also has to pay its workers.

If they have an executive chef with a lot of experience in their kitchen, then they’re going to ask for high wages.

The restaurant has to pay for that chef and their other staff through high prices on their dishes and drinks.

They also generate high prices to cover expensive ingredient costs.

Since Seattle attracts many affluent people, they come with particular tastes and standards for their food.

Chain restaurants won’t cut it.

They need high-quality ingredients in their food, and they’ll be able to taste the difference.

To acquire these ingredients, the restaurant has to pay a lot of money.

Those expenses then get paid through the customer ordering the dish and paying for it.

Seattle has a reputation for incredible seafood.

Its proximity to a large freshwater lake and the ocean gives them plenty of access to several different types of fish.

Even though they have plenty of access, ordering seafood still comes with luxury prices.

Seattle is so expensive because its restaurant scene also drives up the costs.

9. Tourism

Any tourist city will have high prices.

Seattle happens to be big on tourism.

Its famous Space Needle attracts tourists every year.

The incredible nature that surrounds the city also attracts tourists.

Since tourists need a place to stay at night, they often choose the capital city.

The problem with being a city that attracts tourists is that it increases the prices in the city.

Tourists are away from home and need to pay for food and other supplies.

Businesses want to profit from them.

As a result, many services and goods are higher in price.

That also goes for tourist-focused services.

Kayaking tours, Space Needle walks, even hiking tours cost more money because they’re aimed at tourists.

Locals have to pay these high prices as well if they want to participate in the fun activities that the city offers.

Even eating at a restaurant carries with it a high price because of tourists.

The restaurant markets itself for tourism, but the locals have to pay the same prices, too.

Due to its incredible climate and tourist attractions, Seattle is expensive.

10. Price Of Land

The biggest reason that Seattle is expensive comes down to the price of land and its zoning.

The majority of land in Seattle falls under zoning for single-family households.

The rest of it falls into several other categories.

This makes Seattle expensive because it creates scarcity with the type of businesses and other industries that want to buy land in Seattle.

Since there’s very little land for manufacturing, for example, any manufacturer that wants to do business in Seattle has to buy land at an extremely expensive price.

That also comes with expensive property taxes and other steep expenses.

To stay alive in the market, they have to have high prices.

Even with a lot of zoning for housing, there’s still a shortage of housing units.

Many of the people coming to Seattle are young and not ready to settle down with a family.

They’re more interested in apartments or affordable housing.

That’s a different type of zoning which is also scarce in Seattle.

It forces landlords to charge high rent to pay for the expensive land that they bought to build their apartment complexes.

The land in Seattle is extremely expensive.

It influences the cost of living which makes everything else in Seattle expensive, too.