Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Now let's assume (perhaps not accurately to the dollar, but within the ballpark) that a $500,000 house where I live costs $250,000 in Tennessee. (Actually I think the difference is probably greater than that). It would take 73 years of my paying no state income tax to make up that $250,000 difference in housingcosts. ($250,000 divided by $3,423 equals 73 point something).
I'm single, which in California means nearly double the marginal state income tax rate, relative to married folks. It's a curious oddity that California is supposed to be the lefty-liberal, free-love, socially depraved locale (whatever that means), yet their tax code is strongly pro-marriage. Meanwhile, in the staid and "family-oriented" Midwest, the married and single tax-rates are very similar.
But that's not my main point. My main point is that the $500K house in Los Angeles will be $1M in 15 or 20 years. The $250K house in Tennessee will be $300K in 15 or 20 years. I concede that my prognostics may be unrealistic, but they are an extrapolation of what I've seen in the past 25 or 30 years. Expensive places grow ever more expensive, because people actually want to move there. Inexpensive places stay inexpensive, because demand is muted. So when I finally join the choir-eternal, my estate reaps a handsome capital-gain in the California market, but far less in the Tennessee market.
Of course it's entirely possible that my analysis is simplistic. People might give up on Los Angeles, San Francisco, Boston, DC and NYC. Millennials perhaps can't afford to live there, and when the Silent Generation passes on, the glamor-cities will empty out in droves. The Knoxvilles and Savannahs and Peorias and Springfields everywhere will rise in relation, so that nation-wide real estate prices regress to what they were (in relative terms) in 1950. Maybe. But somehow I doubt that. Somehow it seems to me that in vast swaths of our country, housing will permanently cost less than its "real" construction-price (about $100-$200 per square foot), while in other parts, it will permanently cost more. If these trends persist, they are powerful incentive to move precisely where housing is MORE expensive, not less.
I wonder..do people originally from Florida relocate when they retire? If so, where to? (hopefully my question is not considered thread hijacking, sorry in advance if it is )
I'm single, which in California means nearly double the marginal state income tax rate, relative to married folks. It's a curious oddity that California is supposed to be the lefty-liberal, free-love, socially depraved locale (whatever that means), yet their tax code is strongly pro-marriage. Meanwhile, in the staid and "family-oriented" Midwest, the married and single tax-rates are very similar.
But that's not my main point. My main point is that the $500K house in Los Angeles will be $1M in 15 or 20 years. The $250K house in Tennessee will be $300K in 15 or 20 years. I concede that my prognostics may be unrealistic, but they are an extrapolation of what I've seen in the past 25 or 30 years. Expensive places grow ever more expensive, because people actually want to move there. Inexpensive places stay inexpensive, because demand is muted. So when I finally join the choir-eternal, my estate reaps a handsome capital-gain in the California market, but far less in the Tennessee market.
Of course it's entirely possible that my analysis is simplistic. People might give up on Los Angeles, San Francisco, Boston, DC and NYC. Millennials perhaps can't afford to live there, and when the Silent Generation passes on, the glamor-cities will empty out in droves. The Knoxvilles and Savannahs and Peorias and Springfields everywhere will rise in relation, so that nation-wide real estate prices regress to what they were (in relative terms) in 1950. Maybe. But somehow I doubt that. Somehow it seems to me that in vast swaths of our country, housing will permanently cost less than its "real" construction-price (about $100-$200 per square foot), while in other parts, it will permanently cost more. If these trends persist, they are powerful incentive to move precisely where housing is MORE expensive, not less.
Just my two-cents....
I found your discussion interesting, and I cannot say you are wrong. I would point out only that forecasting what's going to happen with real estate prices in a given market is a dangerous and uncertain game at best.
However, you did not address my main point, which was that local and state income taxes are NOT the main component of cost of living, but rather that housing costs are. Do you still maintain that state and local income taxes are more important than housing prices in the cost of living?
...In the very expensive, trendy area in which I am living now [some part of Portland]...
One of my nieces just graduated from medical school and will be spending the coming year in Portland for the first year of her post-graduate training. She's looking for an apartment - and - when I spoke with her - the prices didn't seem that expensive to me given the apartment descriptions. Perhaps the prices just seem expensive compared to what people were used to 20 years ago?
OTOH - she'll be spending the four years after Portland in New Haven. And I suspect she'll be less enthusiastic about both the housing stock and the prices there. Robyn
We live on LI now, with numerous large research/teaching hospitals all within 30 minute drive.
For a few years lived in a very large retirement community in central FL, which has a brand new hospital. We were very, very surprised at the discrepancy from the research/teaching hospitals. Very polite, nice folks, but the quality & resources just not there.
Are you talking about The Villages? FWIW - I don't think of The Villages as being part of any metro area in Florida (it's kind of sui generis IMO).
Also - if people are thinking about trends in terms of medical care in metro areas - I think the large *public* research/teaching hospitals that treat poorer people on Medicaid and the like are very much in decline these days. Whereas the private ones - like Mayo - Cleveland Clinic - etc. - for people who can afford them - are becoming more dominant. Robyn
I believe that statement is very inaccurate. The cost of housing trumps state and local income tax many times over. Let's take California, one of the highest income tax states in the nation. In 2013 my total Calif. income tax liability was $3,423 on an adjusted gross income of $80,172. (There is no local income tax anywhere in Calif. to my knowledge)...
I think it all depends. On our part - we'd be paying a lot more in income taxes in California (more and different kinds of income than you have - IIRC - your pension may get preferential tax treatment). Also - we'd be paying a lot more for housing. Especially in one of the higher priced spread parts of California I like . Or - we'd be living in that 50 year old 500 sf bungalow instead of our current house.
We have some neighbors who moved here from California (for job-related reasons). Most are happy to find out they can buy a nicer house for a heck of a lot less money. Robyn
One of my nieces just graduated from medical school and will be spending the coming year in Portland for the first year of her post-graduate training. She's looking for an apartment - and - when I spoke with her - the prices didn't seem that expensive to me given the apartment descriptions. Perhaps the prices just seem expensive compared to what people were used to 20 years ago?
OTOH - she'll be spending the next four years in New Haven. And I suspect she'll be less enthusiastic about both the housing stock and the prices there. Robyn
Robyn, so much of the many conversations like this come back to family/personal values of the individual. These values can be heavily influenced by family and friends. Many young people ignore the media presented culture and draw heavily on their parents and friends. Your niece went to medical school and probably developed a sense of normal very different than others in her generation. When you go to many of the really high income and high cost areas of the country you find many affluent young people with a different set of life values and expectations. Oh yeah many are immigrants or second/third generation immigrants with great degrees and little debt (not all immigrants had to sneak in the country). They are driving much of the housing market in many areas of the country.
One of my nieces just graduated from medical school and will be spending the coming year in Portland for the first year of her post-graduate training. She's looking for an apartment - and - when I spoke with her - the prices didn't seem that expensive to me given the apartment descriptions. Perhaps the prices just seem expensive compared to what people were used to 20 years ago?
OTOH - she'll be spending the next four years in New Haven. And I suspect she'll be less enthusiastic about both the housing stock and the prices there. Robyn
I suspect she fully understands and appreciates short term pain and long term gain. If she didn't she would have probably bailed out during her Pre-Med program. New Haven will just be a tour date before the big show.
I wonder..do people originally from Florida relocate when they retire? If so, where to? (hopefully my question is not considered thread hijacking, sorry in advance if it is )
We're not originally from Florida. But we moved to Miami in 1973 (when we were pretty much right out of school). After we retired - we moved to NE Florida (in 1995). My husband and I considered other parts of the country. But stayed here primarily because of the weather - the tax climate - recreational opportunities - the overall COL - and 4 older parents in the SE who increasingly needed our help.
Our metro area has grown a lot in the last 20 years - but still lacks some things I'd like. OTOH - many places lack the things we currently have here. Like great medical facilities and great pretty much year round golf. Plus the weather (better in south Florida than here IMO - but still ok here) and the tax climate and still a relatively low COL. It's hard getting the "total package" at the right price. Robyn
I suspect she fully understands and appreciates short term pain and long term gain. If she didn't she would have probably bailed out during her Pre-Med program. New Haven will just be a tour date before the big show.
That's obviously true when it comes to something like post-medical school specialty training. You go to the best programs you can get into - no matter where they're located (and there usually aren't many of them). My niece got her first choices both in Portland and in New Haven (they're basically the best/some of the best programs in the US) - so that's where she's going to live. I have a niece-in-law who's doing her post-dental school specialty training now. Her first choice program was in Milwaukee - so that's where she and her husband are living now.
One problem with being retired is things like jobs/job training - schools for kids - etc. - don't help us in terms of narrowing down our choices. We have to rely a lot more on subjective factors. In fact - the only objective factor that influences most of our choices is money. If you're trying to live only on SS - a small pension - etc. - you're going to rule out Newport Beach CA when you're searching for a new place . Robyn
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
)
. Or - we'd be living in that 50 year old 500 sf bungalow instead of our current house.
. Robyn
