How do investors reach financial freedom in expensive cities?

[Johnathan Alesso]

My fiancé and I are moving from one expensive city to another, albeit much sunnier, city in California.  The housing is expensive in both places, rendering house hacking or fix and flipping almost impossible.  I invest entirely out of state, which has been profitable, but want to incorporate our personal residence into our longer term financial plans.  We want to be financially free within a few years, but expensive housing for our personal residence is a limiting factor. 

Is it generally best to buy in an expensive market to benefit from tax deductions and principal pay-off, or to rent and maintain mobility and avoid a large mortgage balance?  We eventually plan to "retire" in a cheaper city where we can house hack.  For now, though, we will be living in an expensive CA market.

I appreciate your thoughts!