Happiness in HCOL vs LCOL

[clarkfan1979]

Wife and I spend all of our free time hiking mountains. It's why we moved from FL to the PNW a couple years ago. We love it out here. Our first baby is due this summer and we have been looking at putting down roots by buying a home. We are still early stages of pursuing FI but it is a high priority for us. Average SFH here is $670k (so maybe upper MCOL?). We take home $115k after taxes. We can't afford to buy here anymore without severely undercutting our FIRE goals. We did put an offer in on a house a couple weeks ago but then rescinded it the next day as our guts were telling us not to spend that much. We are looking into potentially relocating to a LCOL area, somewhere back east. NC has mountains but it's not the same. Could go back to FL.

We know the right financial move is to leave, but there is a significant amount of happiness we get from being out here. I think long term we will be glad we didn't buy a $670k house, but right now it doesn't seem like an easy decision. I think we'd get greater happiness by working a decade less in a more affordable area vs working a decade more but being in the mountains. But I don't really know. I believe the idea of "build the life you want, then save for it" is right, but in this situation it requires making a heck of a lot more money in order to save for a life out west and still FIRE.

Anyone make a similar move? Is it irrational to still be considering buying out west knowing it will kill our FIRE goal? I think we're looking to be brought down to Earth.

You don't need to buy a house but having the option to buy a house is huge. If you live in a place in which you are forced to rent, I think that would be a mistake. FIRE is all about having options.

I live in Pueblo West, CO and the median house price is around 400K. Denver is around 800K. Pueblo West is 1 hour and 45 minutes south of Denver. I teach community college and my salary is basically the same no matter where I teach in the state. For us, it makes more sense to be in Pueblo than Denver. 

We still have great access to the mountains with less traffic. The views are gorgeous. The average level of education is going to be lower, but that hasn't seen to be an issue for us. The weather is even a little better. We are 3-5 degrees warmer than Denver with less snow. I really like the schools, but we do occasionally have some funding issues that Denver schools might take for granted. Overall, we are very happy in our LCOL area. Our property taxes are very low and some of our neighborhood roads are beat up because they have a smaller budget for it.

People that can't afford to buy in Denver and Colorado Springs are moving to Pueblo County. We have a mini mass migration. Over the past 12 months, median home price in Pueblo is up around 28% and Denver Metro area is up 18%. I would expect this pattern to continue for at least another two years.
 

[lutorm]

If you're willing to get something smaller than average and older than average, in a less-than ideal location, you can probably find something for much less than that. (Averages are typically skewed high since the average is pulled up by the few very expensive houses.)

That's why you buy the median home instead of the average :)

Exactly :)

[clarkfan1979]

If you're willing to get something smaller than average and older than average, in a less-than ideal location, you can probably find something for much less than that. (Averages are typically skewed high since the average is pulled up by the few very expensive houses.)

That's why you buy the median home instead of the average :)

Exactly :)

Within the world of a college statistics textbook, the word "average" is an unofficial term of central tendency. Any term of central tendency (mode, median and mean) can be represented by using the word "average". The above example would be better represented with mean vs. median. The word "average" can be interpreted in many different ways.

[lutorm]

Within the world of a college statistics textbook, the word "average" is an unofficial term of central tendency. Any term of central tendency (mode, median and mean) can be represented by using the word "average". The above example would be better represented with mean vs. median. The word "average" can be interpreted in many different ways.

Well, Marriam-Webster says:

average is the quotient obtained by dividing the sum total of a set of figures by the number of figures.

I'm ESL, though, and in my native language there is no word that means "mean, but maybe median or something like that", just a word for "mean" as defined above, so that might be coloring my understanding, too.

As a practical matter, if you say "the average house is $670k", would you interpret that to mean the mean or that $670k (a fairly precise number) is "some sort of central tendency" for the prices. To me, it's clear that the number $670k has been calculated in some way, and if it's the median they should say the median. (Although it's true that maybe the OP made an imprecise quote.)

My point still stands, you don't have to buy the median house either. In fact, half the houses are cheaper than that. ;-)

[Gone Fishing]

Please don’t move back East!  Houses here are getting just as ridiculous!  (Seriously!)

So we retired to a LCOL rural area which has been great but it ain’t (see what I did there?)the PNW if that is what you are used to and love.  The only problem is the cash we would have to dump into a house to ever move to a HCOL area would significantly change our balance sheet and income statement.  We are happy where we are, but this thought lingers.  Of course there are lower cost housing options (renting, duplexes, condos, etc) and going back to work part time is an option if we really wanted to move, but thankfully we don’t.

Another thing to consider is that you probably have not reached your peak earnings.  One or two promotions will significantly change your FIRE math.  This isn’t to say $670k isn’t a pile of money, because it is, but it may not have the impact on your FIRE date that you think it will.  Fixed rate mortgage payments get “smaller” and smaller as inflation eats away at them. $115k is not a lot of income in a HCOL area.  I’d be job hunting if you really want to stay and buy a $670k house.