'Butterfly Town, USA' Is One Of The Best Small Towns In America - But Living Here Will Cost You

Smithsonian Magazine named 15 small towns across America as the top spots to visit in 2025. Pacific Grove emerged as the only one from California. Locals call it "Butterfly Town, USA" for a good reason. You get remarkable natural spots, a walkable Victorian-style downtown, easy access to the ocean, and plenty of wildlife sights – like the Monarch Grove Sanctuary, where thousands of butterflies show up every fall and winter.

This all seems very appealing, but living in "Butterfly Town" costs a fortune. The U.S. Census Bureau shows Pacific Grove's median household income hit $105,568 from 2019 to 2023 — 36% higher than the national median of $77,719. Most Pacific Grove residents earn well above middle-class levels, but housing costs weigh heavily even on those with above-average incomes. Zillow data from July 2025 shows average rents at $3,295 per month. That's 62% higher than the national median rent of $2,100. A household earning Pacific Grove's median income would spend around 39% of its gross pay just on rent. For context, the U.S. Department of Housing and Urban Development recommends keeping housing costs at 30% or less of your income.

Pacific Grove's real estate market ranks among the most expensive in the country. According to the U.S. Census Bureau, the median home value for a home in Pacific Grove hit $1,129,400 from 2019-2023. That's nearly triple the national median of $428,600 in 2023. At the peak of America's most expensive housing markets, Pacific Grove joins the list of million-dollar cities in the US, a large percentage of which are in California. 

Home prices remain significantly above average here even though population and housing numbers barely moved in the last decade. According to the City of Pacific Grove's Housing Element Update submitted to the California Department of Housing and Community Development, Pacific Grove added just 26 units from 2010 to 2022 — a 0.3% increase. New development faces significant barriers, as there is almost no vacant land left. Water restrictions also make the housing shortage worse, as California American Water has operated under a Cease and Desist Order since 2009.

That created a ban on new water connections, which stalls any housing development. The basic supply-demand mismatch in Pacific Grove is one key factor that actually controls the price of homes in expensive markets nationwide. The financial pressure on existing residents is severe. According to Pacific Grove's 2023 housing needs survey, several renters now spend more than 50% of their income on rent. Pacific Grove's high prices basically limit access to anyone except very wealthy residents, reflecting bigger worries about if future generations will ever be able to afford a home in such expensive markets.

Housing isn't the only cost putting pressure on household budgets in Pacific Grove. Daily expenses run exceptionally high as well. This falls in line with California's status as one of the most expensive states to live in. According to AreaVibes, Pacific Grove's cost of living index is at 202 — that's 102% above the national average of 100.

Groceries in "Butterfly Town, USA" cost 15% more than the national average. For example, local pizza averages $14.92 compared to $12.09 nationwide — a 23.5% markup. Fried chicken costs 35.7% more, and even milk surges up to $5.05 a gallon versus $4.67 across the country. Those percentages add up fast when you're filling a cart every week. Transportation adds another premium. Pacific Grove residents spend 30% more than the national average on transport. The U.S. Energy Information Administration shows California residents paid 35.03¢ per kWh in May 2025 — more than double the national average of 17.47¢. AreaVibes found the typical Pacific Grove electric bill reaches $294.74 monthly versus $193.99 nationwide.

Of course, for all these high prices, Pacific Grove delivers serious perks. According to the City of Pacific Grove, residents enjoy 28 public parks, a protected coastline, and easy access to the historic Point Pinos Lighthouse and Monterey Bay Coastal Recreation Trail. For those able to handle Pacific Grove's steep living costs, they will be able to enjoy top-tier natural spots and city amenities. But with so many expense categories running high, anyone planning to stay long-term should have enough money in their savings to retire rich.