I was more in the mindset of recent history in my area, where anyone that bought a house between 2016-2020 has like a 3% fixed mortgage and has seen the value of their house nearly double. But that feels like maybe more of a function of higher priced homes in general. I see more 500k homes turn into 800k homes than I see 200k homes turn into 500k homes (or 320k, if you want to match the percentage increase). That's probably also selection bias though, so...shrug? I mean, I do browse a lot of small town homes for sale and check the sale histories as well. And I see a lot of homes that last sold 10-20 years ago for like $150k sitting on the market for 200 days at 225k after a price reduction.
I think you're onto something. Stories about a $500k house doubling in value over X years are a lot more attention-grabbing than a $150k house doubling in value over the same time. Getting a 500% return on a $100k leveraged down payment within 3-4 years is eye-popping.
We have to also keep in mind that the alternatives to housing have also gone up. The person who spends less on housing can, in theory, put more into investments. QQQ for example, has doubled since July 2020. That was also an excellent time to buy a house because values were about to skyrocket. But who came out ahead? The person who sank their $100k into a down payment on a HCOL area house, or the person who spent $30k on a LCOL house down payment and put the remaining $70k into stocks? (also factor in the LCOL area has lower costs all around, lower taxes, insurance, HOA fees, etc which add up to several thousand per year)
In either case, whichever person had the higher savings rate is closer to FIRE, excluding the possibility of geographic arbitration. Allowing for geo arbitration, the person who leveraged to the max on a HCOL house between 2020 and 2021 and is willing to sell it and go LCOL wins the ribbon.
The jobs and diversified economy thing is location and individual dependent. If you are a small university professor and your department or funding gets cut, you just need to move. You're probably not going to transition into becoming a utility worker or a nurse. This happened to a friend of mine who was a professor at a small university in rural (small town?) Tennessee. Now they're at a small university in rural (small town?) Alaska and complaining about the dating pool, so I'm not sure they've learned this lesson yet. :p
This might be an issue with hyper-specialization in general. If a professor of French literature or a consultant who specializes in the botany of orchids loses their job in New York City, they will still have a hard time finding an equivalent job without moving. So yes, if you are a hyper-specialist I suppose the best answer is to always be prepared to move, regardless of where you are. This situation particularly affects academe, where sub-specialties are multiplying like bacteria on dog shit, and where there is absolutely no chance of crossing from one niche to another.
In business, however, I suspect there is more wiggle room in LCOL areas or smaller metros, due to reduced competition. They might say, "I see you have mechanical engineering experience with threading titanium rods. I imagine those skills transfer to designing anchors for plastics, right?"
If someone's career trajectory involves working for a big-name tech company, law firm, advertising house, financial firm, or movie studio, you probably need to go to the cities where those things are located. Some people also do not want big houses or kids and do not put a premium on the ability to have those things; but if you want more accessible amenities, networking, communities that match their specific demographics*, and less car-dependence then those things tend to come with unavoidable premiums.
It's fair to ask why a person would choose to want to work specifically for big-name firms in HCOL areas. Getting what one wants in that case might also come with a lifetime of struggling to afford the cost of living in a cutthroat rat race. Choosing to do something else professionally might come with a lifetime of surplus savings, financial stability, and early retirement. Is the satisfaction of the work itself supposed to make up for the costs? What if one is wrong about that?
If you live in a LCOL area and are OK with living in a tiny condo or home, not having kids, and not having multiple pets and cars, then you'll get rich extremely quick. It's going against the grain, but a 75% savings rate is completely possible living that way.
You're correct about the travel distance tolerance of urban vs. rural though. My personal max travel distance for an ordinary bi-weekly errand or event is about 15 miles, and I'll grumble if it's over about half that. Anything farther away needs special planning and coordination ("we're gonna do this thing at the place, on this day, at this time, so everyone plan accordingly"). I wouldn't go to yoga or pottery if I had to drive 43 minutes to do it.
Yea, rural and small town people will happily drive 50 miles to visit a friend, go to a specific restaurant, visit a particular doctor, or buy a specific thing. The thing is, it requires them 45 minutes to drive that far, because there is little traffic and few stop lights. The person traversing from the Gold Coast side of Chicago will spend the same 45 minutes getting to White Sox stadium less than 10 miles away. So, without getting into Einstein, physical distance is less relevant than time distance.
*What would you personally say to someone that objected to entertaining this sort of geographic arbitrage because it required too much effort to locate a place with a sufficiently large population of their specific ethnicity, sexual orientation, or educational background, and they could name several large cities where they knew they could locate such communities without any difficulty?
The barrier here is the "where they knew" part. How many thousands of people comprise the LGBTQ community in Indianapolis, IN? 18,000? 40,000? 60,000? That information is hard to get. You'd have to search for it. How many Asian grocery stores exist in Kansas City, MO or Knoxville, TN? Lots and lots actually, but many people would assume "none". Is there an Ethiopian restaurant in Montgomery, AL? A professional association of civil engineers in Wichita, KS? Modern art collectives in Springfield, IL?
There's also a question of how much is "enough". If Syracuse, NY has 8 Irish pubs (I didn't look) then is that enough to scratch your Irish pub itch, or do you need a place with at least 12? If two thousand people
showed up to a Pride Parade in Little Rock, AR, is that enough? If Athens, GA has only 7 dive bars where you can catch a rock show any given weekend, is that disappointing? Did we even know that Fort Smith, AR (pop. 89k) has its own orchestra?
People just have to look. Although I've been lazy in asking the questions above without researching them all, the point is plane tickets and car rentals are cheap, and the internet is even cheaper. It's odd that in this information age, people are still thinking of small cities with 50k people as if they're 1930s farming villages.
There are non-diverse places with low educational attainment and little to do. But they're relatively rare. The threshold for cosmopolitanism is a lot lower than most people think, unless they've being very picky or demanding the existence of many times more resources than they could ever enjoy.
