Is it true that cost of living equalizes?

[AnythingOutdoors]

Originally Posted by NOVA_guy

If somewhere is cheap, it's usually for a reason. High cost-of-living areas benefit from good job markets, higher salaries, higher quality of life, better public schools, etc. which is why it typically costs more to live there.

I don't think this is universally true. Some places are more expensive primarily because land for new housing is limited and/or regulations have artificially constrained supply. Whereas other places have both good schools and affordable housing because the city is well managed and has planned for growth.

Take for example this 2700 sqft house in Omaha for $395k. High GreatSchools ratings across the board, from 8-10. You can't buy anything in SF for anywhere near this price, and the schools for this house in Omaha as good if not better than most SF neighborhoods (also, school assignments in SF are kinda unpredictable).

Regarding salary. Per salary.com, median pay for Accountant II in SF is $85k whereas the same job in Omaha is $65k. So yes, salaries in SF are higher, but the median home price in SF is $1.3M. You can easily live on $65k in Omaha and home-ownership is within reach, but living on $85k in SF would be a stretch and buying a home is completely out of reach.

Ah, but what about quality of life? I'd argue that this very subjective and personal. Omaha has more going that you may expect. Of course it's not at the same level as SF or NYC, but it's also not rural or devoid of culture. Lower crime, lower cost of living, a clean downtown with lots of restaurants and things to do. Many people would find QoL in Omaha better, especially compared to barely scraping by in a HCOL area.

[mjtinmemphis]

One of the main reasons I am in St Louis is the COL for my lifestyle is significantly lower than in Denver, San Diego or many other cities. My salary doesn't change with where I live.

The premium I would pay to live in the DMV or Boston just doesn't seem worth it unless I was young starting my career in tech or working for the government. There seems to be a lot more upward trajectory in larger premium cities for certain entry-level professionals.

It really depends upon where the individual is in their life. Some choose based on lifestyle others career. There is no right answer to OPs question.

[mayfair]

Originally Posted by Hemlock140

Medians in metro:
Seattle $848k
Sammamish $1.32 million
Redmond $1.19 million


Beyond the metro:
Arlington $569k
Sequim $599k
Mt. Vernon $570k

But good luck finding a nice house in a good area of Arlington or Mt. Vernon for that price. They go fast and many of the houses in those price ranges have issues. Many people end of over spending on the house or living in area near crime, the freeway, in a flood zone or near train tracks to get lower prices in outlying towns. The nice houses will still be expensive. There's more variability in housing stock in rural towns.

[Logicist027]

So awhile ago I made a map in QGIS of all the metro areas by how affordable they are for housing. Other things matter, but not nearly as much imo and from looking at what people actually say when they move to a sunbelt city for a cheaper house.

You can take a look at which metro areas are the most expensive. I got the data from realtor.com & the Census Bureau.

As you can see the most expensive metro areas in the country per sq foot are in the Bay Area. (San Jose specifically) But the most expensive metros in the country of size when accounting for housing costs are #1 Honolulu & #2 LA. They are both 7x the median household income. Miami, San Diego & SF all are next and about even at ~6.15x the income. You pay a heavy toll for warm weather/beautiful landscapes. So live in amazing weather if you want, but you will pay for that. This also assumes that you can make the median household income which is very high in the Bay area.

[Cuero]

Generally it's true in the long run. Exception being special situations like vacation areas where home prices will be well above local median income because of wealthy vacation home buyers. Short term there can be mismatches as people migrate but those equalize over time.

[VitoM2000]

Originally Posted by NOVA_guy

If somewhere is cheap, it's usually for a reason. High cost-of-living areas benefit from good job markets, higher salaries, higher quality of life, better public schools, etc. which is why it typically costs more to live there.

This. And those things are, for the most part, worth the extra cost.