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There are plenty of sensible compromises between the middle of nowhere and SF/NYC/LA etc.
I'm from the middle of nowhere in Tennessee, but lived for about three years in Indianapolis before moving back to TN last summer. Urban living in Indianapolis, Louisville, Columbus, etc., is still fun, and a whole lot cheaper than the prestigious coastal metros. You can find decent SFHs at around $150k within a reasonable walk (<1.5 mi or so) from most of the attractions in downtown Indy.
I made $60k when I left Indy. There is no way I could have afforded anywhere near the lifestyle I had in Boston, DC, SF, etc. Our company was based out of Boston, and the COL differential was only 30%. Going to $78k with the higher cost of living and MA taxes would have been stupid.
There are some people that just have to be in the most major cities, and they'll often make whatever sacrifices are necessary. If you're a top 5%-10% income earner in some sort of high flying field, you can probably easily afford to live there. What I don't get are people with seemingly average jobs living in NYC, SF, etc., and complaining about the hassle, when they could easily find a job in cheaper cities and have a much better lifestyle.
Okay, but not everyone is you. I am 23 and I personally have no interest in the midwest outside of Chicago really, but I have a lot of interest in LA. Is it somewhere I could see myself forever? No. Could I raise a family there? As of now, I doubt it. But should I just avoid it altogether and scratch it off my potential move list because Louisville, Columbus, and Indy are here? Nope.
If young people are moving to NY, San Fran, Boston, LA etc, and then are complaining about the struggle then yeah, that's stupid. You knew what you signed up for. But if you move there and you're genuinely enjoying yourself, then I don't see the problem. And not everyone struggles. I didn't struggle in DC as an intern. Sure there are cheaper options, but cities appeal to people for different reasons.
I have a family friend who grew up in a country town of 4,000. Now he lives in NYC and it's truly his element. What does he need to go to Columbus for? He went from 4,000 people, a local grocery store and Burger King, to 8.5 million and all the amenities he needs, and it suits him.
I have another friend who came to college in SC from NJ, and then moved to San Fran after college to teach. I have no idea how she's surviving, but I haven't seen her complain not once. She's always bragging about her students, so she obviously enjoys what she's doing. Yeah she could teach anywhere, and most anywhere else would be cheaper, but not everyone is caught up in that.
Especially at a young age, again with no spouse or kids and limited expenses, you should be allowed to go where you want without any judgement.
The numbers of metros where one can easily get by without a car can probably be counted on one hand. With the exception of Chicago, the rest are incredibly expensive. If you want to go to an area not serviced by public transit, you'd have to rent a car. What you can do is greatly restricted without a vehicle.
Yes, that was the point. Dropping the cost of a car offsets the expense of rent/mortgage in the more expensive cities. Don't forget Philly, which is also at the price-point of Chicago.
And the whole "what you can do is greatly restricted without a vehicle", that's true to an extent. I have lived without a car in Philly for nearly 3 years and rarely have to rent a car. Between train service, taxis, uber, etc. there's very little I need to rent a car for. That is, unless I go hiking for the weekend or drive to the shore. And there's car shares that lower the burden if only needed for an hour or two.
Regardless, the cost of car ownership raises up the COL.
Are they "turning their back" on SF and NYC or is it that they're now old enough to make babies and move to the suburbs of Phoenix and Denver like everyone else?
The answer seems obvious if people born in 1980 are considered millenials.
Yes, that was the point. Dropping the cost of a car offsets the expense of rent/mortgage in the more expensive cities. Don't forget Philly, which is also at the price-point of Chicago.
And the whole "what you can do is greatly restricted without a vehicle", that's true to an extent. I have lived without a car in Philly for nearly 3 years and rarely have to rent a car. Between train service, taxis, uber, etc. there's very little I need to rent a car for. That is, unless I go hiking for the weekend or drive to the shore. And there's car shares that lower the burden if only needed for an hour or two.
Regardless, the cost of car ownership raises up the COL.
Is Chicago or Philly without a car any more than Indy or Atlanta with one? I just sold my car that had a lot of negative equity rolled into the loan (probably raised payment by $150/month), paid off the remaining negative equity, then bought a 2006 Ford Escape in cash. I have no car payment now, registration was $31.50, and insurance will be about $250 every six months. Car ownership, done right, doesn't have to be extremely expensive.
When I worked in Indy, I had a colleague who was from Chicago move back. He lived in the Loop. He was driving a leased Audi, and just his parking spot was $200/month. Under those conditions, yeah, I can see selling it.
Is Chicago or Philly without a car any more than Indy or Atlanta with one? I just sold my car that had a lot of negative equity rolled into the loan (probably raised payment by $150/month), paid off the remaining negative equity, then bought a 2006 Ford Escape in cash. I have no car payment now, registration was $31.50, and insurance will be about $250 every six months. Car ownership, done right, doesn't have to be extremely expensive.
When I worked in Indy, I had a colleague who was from Chicago move back. He lived in the Loop. He was driving a leased Audi, and just his parking spot was $200/month. Under those conditions, yeah, I can see selling it.
I don't know the answer to your question, and I'm not sure it's an easy question to answer. It depends on the house, neighborhood, etc. Quality has a way of throwing numbers off.
Re: ownership done right. Sure, there is a better way to own a car than getting an expensive lease or buying a new car every so often, like some folks do. However, you can't ignore the MASSIVE investment it takes to net the vehicle in the first place. Even if you buy something inexpensive that lasts you the next 6 years (say $8k), you're still paying the following:
Approx $110 per month (up front, but broken into months)
$40/month in insurance
PLUS
Maintenance and gasoline ($250/month?) - Maintenance can be MUCH more, especially if you need new tires ($800), brakes ($500+), etc etc. And that's not considering inspections, accidents, speeding/parking tickets, etc. So the number above is very conservative.
That's still about $400 per month. It all adds up. In Philly, I pay for unlimited travel for about $70/month, rent a car about 4 times a year, and get a cab about once a month (maybe less?). That's about $100 - $150 per month tops. Again, that's $3000 per year that I save (400 - 150 = 250 x 12 months), paying for more than a generous mortgage payment. Transportation really is stifling in terms of cost.
And that's not the same for everyone who does not have a car, but it shows how much the differences offset the COL in one scenario.
Great Article Titled:
"Why America's Richest Cities Keep Getting Richer:
They are not just the places where the most ambitious and talented people want to be—they are where such people feel they need to be." https://www.theatlantic.com/business...crisis/522630/
Ive long suspected that the notion of cheaper housing=more money left over when it came to city-vs-city was largely a myth because its all relative to income.
The numbers of metros where one can easily get by without a car can probably be counted on one hand. With the exception of Chicago, the rest are incredibly expensive. If you want to go to an area not serviced by public transit, you'd have to rent a car. What you can do is greatly restricted without a vehicle.
I think you can uncontroversially claim six cities which is one more than the usual five fingers. They'd be NYC, Chicago, Philadelphia, San Francisco, Boston and DC. Of those, Chicago and Philadelphia are not incredibly expensive. However, on top of that there might be claims for large areas of Seattle, LA, Portland, Baltimore, the Twin Cities, Denver, San Diego, and maybe some others.
Great Article Titled:
"Why America's Richest Cities Keep Getting Richer:
They are not just the places where the most ambitious and talented people want to be—they are where such people feel they need to be." https://www.theatlantic.com/business...crisis/522630/
Ive long suspected that the notion of cheaper housing=more money left over when it came to city-vs-city was largely a myth because its all relative to income.
I don't think that analysis is particularly helpful. It's not clear whether "monthly housing costs" is simply the sum you pay or the total cost of your unit. Since most single New Yorkers have roommates, it's not hard to believe that the median housing costs for someone living in Manhattan is around $1,600 per month.
In Manhattan, 36.3% of units rent for $2,500 or more. In Charlotte, 1.7% rent for $2,500 or more (36% of units rent between $800 and $1,250). Big difference.
I don't think that analysis is particularly helpful. It's not clear whether "monthly housing costs" is simply the sum you pay or the total cost of your unit. Since most single New Yorkers have roommates, it's not hard to believe that the median housing costs for someone living in Manhattan is around $1,600 per month.
In Manhattan, 36.3% of units rent for $2,500 or more. In Charlotte, 1.7% rent for $2,500 or more (36% of units rent between $800 and $1,250). Big difference.
Good point.
Still I find it amusing that despite exorbitant housing costs, the same expensive cities also leave you with more discretionary income, which is totally contrary to what I always read people say on CD.
Still I find it amusing that despite exorbitant housing costs, the same expensive cities also leave you with more discretionary income, which is totally contrary to what I always read people say on CD.
In some industries, yeah, if the difference in compensation between different markets is greater than the difference in housing costs.
Millennials will continue to move to pricey markets as long as those markets offer the best career opportunities. A lot of people don't work in a field that offers the flexibility/autonomy where they can simply move to Cleveland because it has a low COL. That might be easy for some people, but I think a lot of posters on C-D assume it's not that difficult for most people to find equally rewarding career opportunities in any number of mid-sized markets. That's rarely true in my experience.
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