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States tax in different ways, but they don’t usually equal out taxing elsewhere . And some high-tax states use it to fund things people may not care for or need.
That said, housing prices are the largest part of COL for most. Fixed rates mean mortgages are fairly stable once you lock in, which is why people search for the sweet spot where income-to-housing ratio is sufficient to make things work out best. That said it is a fairly personal choice, one where choices have to be made on priorities.
Yeah idk. I moved from MA to NJ in 2021. I feel NJ offers a slightly higher QOL for middle income people while being consistently 10-25% (or more) less expensive than Eastern Massachusetts.
I do have to say, wages are slightly lower in NJ than MA granted the cost of living is quite a bit lower in NJ than Ma. But not so much more that you have more people struggling with rent. I think wages are about 5-15% lower than MA here while rent is 10-25% lower. I have been applying to jobs, a few in MA recentyl, and while the offers are significantly higher… I cant find a single apartment that is livable within 45 minutes to Logan/Downtown/Cambridge. If I follow that path and live in MA… id be paying much more in rent and amenities but I would be able to do far faarr less than here in NJ. Is that really a higher QOL in MA just because its more expensive than NJ?
So in general, i give a mixed answer. More money = more services = more quality = better lives. However, there are exceptions to the rule. Imho.
But when I lived in Central FL and Central New York, yes, it was apparent. But I think the offerings were higher in CNY over CFL, despite it being cheaper.
Maybe its all relative.
I myself am in this predicament. Stay in Jersey with a decent wage and pay $2,500 for a really nice modern 2 bedroom 2 bathroom on the Jersey City light rail. Or, take a slightly higher pay in Massachusetts and live further out paying 2,850 for a 2 bedroom built in 2004 with no direct rail access (i would have to drive to the CR). While the answer might seem obvious (stay in jersey) there are other factors like family to consider. I consider Jersey the highest QOL place for me at this time given its high, but not the highest COL.
I think if we put a scatter plot if HDI or QOL Measure over COL, it would be rather correlated. I think there are multiple studies that show this.
Whereas I do recognize that NJ is cheaper in regards to housing, I've always found that their taxes are so shockingly high that it really offsets the difference in price.
Still, I went to rent.com and did a search for $2500, 2 bedroom apartments in the Boston area and this is what I came up with. Not exactly luxury, but not bad, either:
Whereas I do recognize that NJ is cheaper in regards to housing, I've always found that their taxes are so shockingly high that it really offsets the difference in price.
Still, I went to rent.com and did a search for $2500, 2 bedroom apartments in the Boston area and this is what I came up with. Not exactly luxury, but not bad, either:
Yes, rents are cheaper in NJ than MA by a long shot.. but, buying is a whole different realm. Taxes are astronomical in NJ. However, the prices of homes are less in NJ than MA.
I like to say, would you rather pay 800k with 8k in taxes a year for a home in MA.. or 500k with 15k in taxes a year in NJ.
I assume there are exceptions of just some anomalies that just aren't worth it. Some cheap places have very little opportunity to where its not worth it. And some places are too pricy even for all the merits they offer. And most importantly, it depends on what industries you work in and what job offer you get. But that aside.
But on the whole seems like the majority of areas, cost of living has a way of balancing out. And there's no such thing as a free lunch. I feel like many people move to a cheaper area thinking they're going to save money, but then realize there's a lot of costs they didn't take into consideration.
Places with lower home prices and lower CoL typically have lower wages and less career opportunities..
Places with lower taxes in some aspects, usually make up for it by charging other types of taxes/fees. Or the public services may be lacking.
From what I've seen, there's usually something. For example, there may be little difference in property taxes you pay in a place with high tax rate/low property vs. a place with high tax rate/low property values. Or you might find an affordable place to live but high HOA and/or high cost of home insurance.. etc.
It's easy to move somewhere because of 1-2 of these factors in isolation, but everything put together, there's usually a compromise somewhere.
What has been your personal experience with this? Do you find that CoL often equalizes?
That was not my experience. When I moved from Cleveland to Wooster in 1982, my salary increased and my cost of living decreased. A lot of these state comparisons leave out important factors. While Ohio has income, property and sales taxes, it does not have a personal property tax, nor does it have estate or inheritance taxes. Ohio also has secure municipal bonds which are free from federal, state, local, and school district income taxes.
With respect to Taxes, very true. States with no state income tax just tax something else, they still need the revenue..
You can stilll game the system. I you retire on SS, your SS is non-taxable incomr, so you gain nothing where there is no income tax.i If you don't drive anymore, retire in a state with high gs tax -- let someone else pay it.
I would assume cities/counties/states with outlier amounts of debt per taxpayer to have some combination of higher taxes and lower quality/quantity of government services/infrastructure.
My opinion is that cheaper COL places don't equalize with the higher COL places financially even accounting for taxes etc. Dallas & Houston really are a good deal financially.
The secondary question you are asking about QOL and other metrics is a personal subjective opinion that is very important but makes the conversation impossible to analyze objectively. Sometimes you are paying for warm weather or natural geography (aka LA). Other times a place is expensive because of job opportunities (aka San Jose). Whether or not you think it's worth it depends on you. I think the best strategy generally speaking is to find a place that has the combination of things that you think are important and pay for that, and leave the other stuff out.
For instance, I live in LA and I was talking to someone that wants to have more of a 4 season environment. It's easy to recommend him to move, LA doesn't fit him. He would be paying for something he doesn't care about. Some other people like yours truly love living in warm weather with the beaches & mountains so it's worth it for me. LA has other things to offer but you get my point.
Another general opinion of mine is that very expensive places usually aren't worth it to the vast majority of people that live there. I think it only makes sense for 3 types of people to live someplace very expensive - the functionalists (economy, jobs aka tech in San Jose types), the lovers (Cultural amenities, geographic opportunities aka LA & Miami beach/warm weather lovers) and finally the rich who can just afford to blow off a lot of money.
Most people don't fall into any of the three categories so they would be paying a ton of money for something that really doesn't suit them. I think that is a waste and it would be better for them to find another place they would enjoy better. At least find a place that is cheaper; if they don't love it, whatever, they aren't paying a ton in rent anyway.
Last edited by Logicist027; 11-14-2022 at 03:20 PM..
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. How you win is setting yourself up, live with roommates early on, buy investment properties, save money, invest, make sure early on which is when you have the most autonomy, you're doings to set yourself up later on.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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That used to be the case. You move to a cheaper area, but then have to pay a lot more for car maintenance and gas for the commute, medical and other needs. I remember when we lived in Castro Valley, CA in the 1980s and wanted a bigger house. I worked in Oakland which was a commute of only 18 miles. We would have been able to afford a brand new, much bigger house in Tracy, CA and went to look at them. The drive was 50 miles and over an hour with no traffic. In addition there was a nasty smell in the air at the development from nearby agricultural land. We ended up just buying an older, but larger home in the same town. Now, with the opportunity to work from home, or at least hybrid, one can move to a much less expensive area without much less or no commute cost. Even here in the Seattle area, despite the pandemic-related price increases in the outlying areas, they are still much cheaper than the metro.
Medians in metro:
Seattle $848k
Sammamish $1.32 million
Redmond $1.19 million
Beyond the metro:
Arlington $569k
Sequim $599k
Mt. Vernon $570k
Seeing the above 2 comments, this is why I think the middle ground is best. The cheapest places have poor job opportunities. The expensive places, even with their job opportunities, price out the majority of people. This is why I think small towns near cities, or mid-size cities are the best areas to live for the majority.
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