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I live in a small city in northeast TN that has historically had very low property prices and reasonable property taxes. I bought a townhome for $96k in 2019 - PITI with HOA fees is around $700/month. My water/trash/sewer fees are $40-$50/month. There is no state income tax. My dollar stretches farther than you might think.
I've wanted to leave for years, and recently had an offer with ~$20k raise in SC. Looking around, anything to rent comparable to what I have now (2BR/2BA with garage) is at least double my current house payment, maybe pushing $800-$1000/more. State income taxes alone were an effective 6%. By the time I backed out the rent and the housing costs, the $20k was basically gone.
That's not even counting for the fact that I'm renting again, and back on that treadmill. I've never lived in that area before, so wouldn't want to buy immediately. With rising rates and record high prices, it seems like my dollar wouldn't go very far as it is, even buying. I'd be paying a lot more, probably not as much renting monthly, just to get something like what I have.
I feel stuck. Anyone else in this predicament?
You say you want to leave TN, you’re able to do that with a job opportunity, yet you don’t want to leave.
So be more honest to yourself… if you’ve wanted to leave for years, and you can leave tomorrow and walk into a reasonable job, why aren’t you? It’s not a math problem, it’s something else.
You say you want to leave TN, you’re able to do that with a job opportunity, yet you don’t want to leave.
So be more honest to yourself… if you’ve wanted to leave for years, and you can leave tomorrow and walk into a reasonable job, why aren’t you? It’s not a math problem, it’s something else.
Without necessarily defending the OP, here's a point to consider.... persons earning OK money in a low cost of living place, would need to earn substantially more, to enjoy the same spending-power and savings-power, in a higher COL place... especially once we include the higher taxes. This means that even a better opportunity elsewhere, may still be unattractive, on strictly pecuniary basis.
A separate issue is qualify of life... culture, amenities, social opportunities, climate and so on. For these things, one might be willing to pay more... provided that one understands the tradeoff.
For buyers who are cash-strapped, mortgage rates matter enormously. Others, who are buying well below their means, and who can afford to pre-pay the mortgage aggressively, aren't so strapped. For those buyers, what's most important is to score a decent-purchase price and subsequently to enjoy strong capital appreciation. Both are fraught propositions in the present market.
In our area even if you own your home outright it's not necessarily the right time to trade. If you are very well located and you want to be a bit more rural those areas could drop more than your current location (much more if those locations doubled in the last 2 years and your location is only up 35% -- for instance).
I live in a small city in northeast TN that has historically had very low property prices and reasonable property taxes. I bought a townhome for $96k in 2019 - PITI with HOA fees is around $700/month. My water/trash/sewer fees are $40-$50/month. There is no state income tax. My dollar stretches farther than you might think.
I've wanted to leave for years, and recently had an offer with ~$20k raise in SC. Looking around, anything to rent comparable to what I have now (2BR/2BA with garage) is at least double my current house payment, maybe pushing $800-$1000/more. State income taxes alone were an effective 6%. By the time I backed out the rent and the housing costs, the $20k was basically gone.
That's not even counting for the fact that I'm renting again, and back on that treadmill. I've never lived in that area before, so wouldn't want to buy immediately. With rising rates and record high prices, it seems like my dollar wouldn't go very far as it is, even buying. I'd be paying a lot more, probably not as much renting monthly, just to get something like what I have.
I feel stuck. Anyone else in this predicament?
What about the money you would make from selling your current place? Would that not help?
I feel locked in because I have student loan debt, and even I wouldn't let that deter me, at least when it comes to renting.
If I were to get a $20K raise, unless it was to the Bay Area or somewhere insanely expensive, I'd be out of my old 3-story 1BR walkup; IDC if the rent is under $900.
Are you taking into account the increase in housing value for your area versus where you would move?
I've owned property in high income areas such as Honolulu and San Francisco. The amount my property value increased vastly outweighed other considerations. Then we moved to podunk Northern NV and I figured out property value would probably be flat, and darn if the pandemic didn't make it increased 30% a year.
Just another thing for you to consider.
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Mortgage rates are not directly tied to the Federal Funds rate, which is a short-term rate. Just because that rate goes up 1%, that doesn't automatically mean that mortgage rates are going to rise 1%
I hope I didn't insinuate that the mortgage interest rates would be EXACTLY as the "Fed" rate. If that is how my post reads, then that was my mistake.
Sorry for the confusion.
On a side note...the mortgage interest rate is more closely paired with the 10-year note. But, again, not exactly.
Without necessarily defending the OP, here's a point to consider.... persons earning OK money in a low cost of living place, would need to earn substantially more, to enjoy the same spending-power and savings-power, in a higher COL place... especially once we include the higher taxes. This means that even a better opportunity elsewhere, may still be unattractive, on strictly pecuniary basis.
A separate issue is qualify of life... culture, amenities, social opportunities, climate and so on. For these things, one might be willing to pay more... provided that one understands the tradeoff.
Yep, I’m aware. But I talk in a funny accent and sadly that triggers almost everyone in earshot to approach me and share that they wish they could travel to (insert random country name) but they’re held back for (pathetic excuse) so I find it tiresome. If someone GENUINELY wants to change their circumstance, and they have a freeking job offer to make it way easier than the lay person, but their excuse is interest rates and cost of rent being more than they pay in their peasant town… nah they don’t want to leave. They’re a lifer and will find excuses until
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