Real Estate’s Threat to Your Happiness
Posted by admin in Real Estate
Imagine making over $200,000 a year and not being able to afford a home. It seems crazy, but in the big real estate markets it's not uncommon at all. This Wall Street Journal article on a couple that ditched New York City for Charlotte, North Carolina shows how the cost of real estate can actually make your life miserable:
"I was at a great New York company with Progressive family-friendly policies. That was the scary thing. It was just the work itself, the nature of the business, that made life so hard. My husband and I were both making six-figure salaries, but buying a house seemed like an impossible dream. And I was letting work consume me. I felt like a leaf in a current, having no real effect on which way the water swept me."
I've done a couple of moves from low cost of living areas to high cost areas and the reverse as well, and what I've concluded is that cost of living generally doesn't mean the day to day expenses, it means the cost of living in a house. In other words, the difference in price of milk and bread isn't so much the problem from one city to another, it's the cost of renting or owning a home. What you get for your dollar from one place to the next in terms of housing is crazy.
I understand some cities are more desirable than others, and I wouldn't ever think that buying a house on the beach should cost the same as buying the same house if it was situated between a polluting factory and railroad tracks. But it does seem that the luxury lifestyle so many people have bought into has driven prices in some areas far beyond sanity. The desire to live in a certain zip code makes people lose their minds a little, and before they come back down to earth they're saddled with a humongous mortgage that guarantees the next decades of their lives will be spent working their tails off just so they can come home exhausted, quickly eat a meal and fall into bed pooped, never enjoying the zip code they worked so hard to attain.
I don't see an end in sight to that, though. I think the WSJ article I referenced isn't part of a trend, but is instead the example that proves the rule—people being sensible enough to avoid the rat race are newsworthy because they're not the norm.
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We live in the DC region and make 6 figures (combined), live in a 66 year old cape cod, have an interest only mortgage, and still have problems with our finances. I just wish we could get well-paying jobs near our families, because our home would cost $250,000-300,000 less.
My wife and I are in a similar situation. We are making 6 figures and can’t buy a place in the SF Bay Area. We probably could but we have some pretty high standards. The amazing part though is that we are even debt free (completely) and still can’t do it.
But honestly, what’s the big deal? Rent a nice apartment and invest your money in other ways. America is completely pre-occupied with home ownership, but in much of Europe people rent apartments their whole life.
How happy is the couple in the article in Charlotte? That’s a pretty dramatic change in environment from NYC. These places are expensive to live because they have a lot to offer and everyone wants to live there. Let’s face it…Charlotte, Alabama, Tennessee, whatever, they are cheap because nobody wants to live there.
They could buy a house in parts of Queens for $400,000 to $600,000 or a co-op in a good school district near parks like Forest Hills for less. And still have the great job and as much of the Manhattan lifestyle as they desire, just a subway ride away. But they probably would consider moving to an immigrant area or away from 212- phone #s “lowering themselves”. Good riddance, they’ll regret it eventually.