What Is The Cost Of Living In Oregon Vs. Colorado?

Cost of living is a main factor that many people use to determine whether they want to live in one location versus another. When it comes to Oregon vs. Colorado, both states have much to offer potential residents including uniquely incredibly landscapes, pleasant climates, and ample recreational opportunities. But, how do these two states stack up when it comes to cost of living?

The cost of living index in Oregon is 113.1, meaning it’s about 13% more expensive to live in Oregon than the national average (100). Colorado, on the other hand, has a cost of living index of 121.1, so it’s more expensive than Oregon and both states are significantly above the national average. The median price of a home in Oregon is $438,100, which is about 50% higher than the national average of $291,700. Meanwhile, the median home price in Colorado is $488,600 – only about 11.5% higher than Oregon.

Aside from median housing prices, let’s examine how the cost of living compares in Oregon vs. Colorado

When you consider the fact that the median home price in Oregon is approximately 440,000, it is more affordable to buy a home here than in Colorado. With Colorado’s median home price of nearly $500,000, you’d end up spending between 10 and 15 percent more on a home in Colorado compared to Oregon.

In recent years, we’ve seen record-low interest rates on home loans, increased demand from buyers, and a housing shortage. This has resulted in a record increase in home prices all across the U.S., but particularly in the state of Oregon. Not to mention, the hesitancy of potential sellers to put their home up on the market in the middle of a global pandemic has been a major factor in the limited supply of homes.

For the select few homes that are available for sale, both Oregon and Colorado are experiencing competitive bidding and many are ultimately selling for way above the asking price. Like Oregon, the issue in Colorado is demand-based. The state has long been a very desirable place to live, and numerous people migrating there has caused Colorado’s housing market to become one of the most expensive in the nation.

During the COVID-19 pandemic, people moved to Colorado at record rates and apartment-dwellers looked to purchase homes in the state. In Denver, the amount of money bid over asking price is also at an all-time high. While it may be an ideal time to be a seller in Oregon or Colorado, both housing markets are overly competitive and home prices are higher than ideal for buyers. Regardless, it is still slightly more affordable to buy a home in Oregon than Colorado.

Oregon has consistently been one of the fastest-growing states in the nation, fueled by transplants moving here from other states. However, in the last few years, the state has started to see slower growth. Colorado, however, remains one of the fastest-growing states because of its booming economy and abundant employment opportunities.

However, overall, more affordable housing is an advantage to living in Oregon over Colorado. Although both states have median home prices that are well above the national average, housing costs are still between 10 and 15 percent cheaper in Oregon.

Overall, the average monthly rent in Oregon cities is generally below the national average. However, Oregon is fifteenth on the list of the states with the highest average rents in the nation. The statewide average rent is $1,110, but prices vary considerably based on where you live in Oregon. For example, apartments in Hillsboro, OR are the most expensive in the state, renting for $1,790 a month. Whereas, Keizer, OR apartments are the most affordable, at $1,059 per month, on average.

With that said, the following table outlines the average monthly rent for some of the various cities across the state of Oregon:

Oregon was one of the first western states to adopt a state income tax. It has a progressive income tax system, with four income tax brackets in total that range from 4.85% to 9.9%. With this type of system, the income tax you pay depends on how much you make. Oregon’s top marginal rate (9.9%) is one of the highest in the country, but only a few taxpayers actually pay this rate. The rate only applies to single filers that make at least $125,000 in taxable income, or $250,000 for joint filers.

Unlike Oregon and most states that have an income tax, Colorado has a flat income tax. The state also boasts one of the lowest rates in the nation. Regardless of your income, you pay the flat rate of 4.63% of your taxable income in Colorado. Colorado is among nine states that have a flat income tax rate, and its’ rate sits somewhere in the middle of the pack.

One of the major financial benefits of living in Oregon is the fact that there’s no state income tax – neither at the local nor the state level.

Colorado, on the other hand, has one of the lowest base sales taxes in the country (among states that do have a sales tax). The base rate is 2.9%, but with all the extra city and county sales taxes you could end up paying as much as 11.2%. For instance, San Juan County has a sales tax rate of 9.4% and Boulder County’s is 5%.

Whether you’re considering purchasing a home in Oregon or Colorado, it’s important that you understand the property taxes. In Oregon, there are 1,200 local taxing districts, and the property tax rates vary between each. Tax collections are handled primarily by Oregon’s 36 counties, which assess property and decide the taxes owed. The average effective property tax rate in Oregon is 0.90%, which is the 25th highest rate in the nation. Though, tax rates differ from county to county. For example, Josephine County has the lowest rate at 0.58% and Morrow County has the highest at 1.24%.

Fortunately, Colorado has some of the lowest property taxes in the U.S. The average effective property tax is only 0.94%, meaning the average Colorado homeowner pays 0.49% of their home’s market value annually. Though, some areas have rates that are even lower. For example, Gilpin County’s effective property tax rate is 0.23%.

Whether you decide to settle in Oregon or Colorado, transportation costs are another important consideration to determine the overall cost of living in either state. These expenses include things like vehicle gas prices, gas prices, monthly transit passes, bus fares, and other public transportation fees.

With Oregon’s transportation cost index of 107.1 and Colorado’s transportation cost index of 106.7, these expenses are only slightly cheaper in Colorado. Based on the table below, you can see that Colorado residents enjoy more affordable lower gas prices.