Housing Costs & Lifestyle Choices

[CBnCO]

As my wife and I contemplate our future path, we've pretty much got the day to day MMM lifestyle and spending down and under control; but, the remaining puzzle is where and how to live once we decide to make the move from relatively good dual incomes, at jobs neither of us really care for, to a life less focused on earning money. We currently live in a $500K single family, suburban house with a $300K mortgage in the Denver area (so, relatively easy access to just about everything); but, not sure how much longer we want to work full time just to afford the payments on the house. In essence, we could take our current equity, buy a cheaper house for cash, and pretty much be FI now..or, work 3-5 more years to save enough to pay off our current house or one like it.

The problem I'm seeing is that real estate values in desirable metro locations (pretty much anywhere in the U.S.) are relatively high and are where most higher wage people tend to aggregate (so, these pricing levels based on supply/demand make perfect sense). But, there are vast rural areas of the U.S. where land is plentiful and real estate is dirt cheap in comparison. I've seen houses listed with acreage and/or on rivers and lakes for under $150K. The commonality in these areas is that while there may be open space and nature, there isn't much in the way of vibrant economy.

While we both have lived primarily near cities, we have had some opportunity to spend time in the "country"; but, still worry if the more limited opportunity for community and stimulation would prove undesirable even with the real estate bargains that exist.

I know the decision of where to live and what constitutes stimulation is really unique to each individual; but, I'd still love to hear some perspective from others who have downsized or moved to a cheaper area or even those who chose to stick it out????

[matchewed]

Live within your values. Determine your values first and then find the cheapest place which aligns with that. If you really dig more urban living the big 10 cities aren't the only cities in the US. You can find plenty of cheap cities to live in too.

[deeshen13]

Just wanted to say they are options for large, vibrant cities with reasonable costs of living.

I live in a first-ring suburb of Minneapolis (10 minutes to downtown, 5 to uptown), and purchased my house (4 bed,2 br, 2100 sq ft) in 2013 for 180k.  Worth probably 225k right now.  I'm sure they are many other examples of this, just do your due diligence (or consider Minneapolis!).  Good luck.

edit: to add that greater Minneapolis has nearly 4M people, and the Unemployment Rate in MN is 3.7%.

[JLee]

I paid $140k for my house in Phoenix in 2013. I love it there.

[justajane]

Just wanted to say they are options for large, vibrant cities with reasonable costs of living.

I live in a first-ring suburb of Minneapolis (10 minutes to downtown, 5 to uptown), and purchased my house (4 bed,2 br, 2100 sq ft) in 2013 for 180k.  Worth probably 225k right now.  I'm sure they are many other examples of this, just do your due diligence (or consider Minneapolis!).  Good luck.

Yes. YMMV. I live in an inner ring suburb of a major Midwestern city that scores 65 on Walk Score. It's a very sought after neighborhood in which houses usually don't stay on the market for more than a week these days. Market value of my historic 1920s home is 215K. 3 bed/2 bath. 1800 sq feet.

[ysette9]

My advice is to RENT until you figure out a good place to settle down! There is zero need to commit yourself to something like buying a house if you are anything less of sure that it is the right decision. Even if it is cheaper to buy rather than rent (like Denver and some other areas) you are still better off retaining that flexibility in order to learn.

[MrStash2000]

You can find plenty of nice homes in the DFW area sub 200k.

[Guesl982374]

My advice is to RENT until you figure out a good place to settle down! There is zero need to commit yourself to something like buying a house if you are anything less of sure that it is the right decision. Even if it is cheaper to buy rather than rent (like Denver and some other areas) you are still better off retaining that flexibility in order to learn.

This. I am sure my wife and I will buy in the Boston area to ensure housing stability / our kids go to decent schools. Yes, this will add on 3-5 years to the magical FI date but for us, its worth it. Once the kid(s) are out of HS we plan on selling and renting in different areas, rural to beach to big city, to figure out what we like and to get a variety.

[Poeirenta]

Having lived in city, suburb, and now country, I think matchewed is right on about values. For a long time, we dreamed of living on acreage, somewhere we could hike around and ideally not see other humans from our doorstep. The farther we went from our then-home city, the less expensive the land prices, and we were able to buy 80 acres for just over $1000/ acre. We fell in love with the land and didn't really pay that much attention to the closest towns, other than the distance to the grocery store and home depot. We came out to the property every other weekend most of the year for about 4 years, so we got to know the area a little better, but not that much in depth since we were just part-timers.

When I landed a job here, we switched gears dramatically from the city to the country. Luckily, it turns out we really like our little town, and have found some good people to hang out with. Best advice we got was to learn to cook every ethnic food we like that isn't Mexican, because there aren't any other options!

If we had tried to do this in our twenties or even early thirties, I don't know that we would have transitioned so well-my husband in particular, since he was more into going out to shows and events with friends (I am a bit more of a homebody). Now, our entertainment/stimulation options are movie theater, live shows every now and then, talks at the local community college, and some summer festivals/parades and that sort of thing, and that suits us pretty well. Most of the time we like to just hang out up on the hill in the middle of the woods, though!

TL;DR: low housing prices aren't enough if you aren't anchored by other things that you like about the lcol place you find.

[matchewed]

I'm also unsure that a blanket "just rent" until you figure it out is the best way to go. It really depends on your local rent/buying markets and how long you intend to stay in any particular place. The NY Times calculator can tell you which is optimal.

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

[2527]

MMM is living in Longmont, not too far from Denver.  Check it out.  It works for him.  If not Longmont, something like it?

[Greenroller]

I too live in the Denver Metro area and have moved  out of the area/state forr many of the same desires that you stated. Ultimately we came back to Denver (suburbs) because it really is such a lovely place. I can be in the mountains in 20 min or the heart of the city in 20 min. My kids attend an excellent public school, and because we bought before prices got ridiculous, our home has greatly appreciated. I find work/life balance to be very reasonable here. Depending on where you live now, maybe consider downsizing and putting yourself closer to work or open space. There are plenty of great places in the USA to live, I have seen and been to many, but no place compares to the diversity and beauty of Colorado. That being said- its getting crowded as #%$@ here.  A lot of that is due to the .bong phenomena as well as the .com boom and who could blame all these people for wanting to be here, it truly is a majestic place.

[ShortInSeattle]

Hi CBnCO,

Our situation was very similar to yours about 18 months ago. We were living in a rather expensive home (condo) in the city with 300K left on our mortgage and fairly high ongoing costs. We really liked our house too! But paying the sucker off (plus saving enough to support the monthly HOA, utility, taxes) was going to take us another five years.

Add to that the fact that we love Seattle and didn't want to leave... and we love being near all the activities and public transit... we were in a bit of a pickle. We'd done the semi-rural thing for about a decade previously and it didn't really suit us. We got bored out there and didn't want to move back to the burbs.

As we were wrestling with all this stuff a much smaller unit on a lower floor came up for sale in our building and we snapped it up. We sold the big/fancy unit and ended up with a paid off (smaller) home and much tinier HOA, taxes, and utilities. That shifted our FIRE plan forward significantly.

It's been an adjustment. Our old place was impressive and luxurious - our new place isn't impressing anyone! We gave up our view, our parking spot, some nice features, and a lot of square footage.  The flipside is that within a year of the swap we hit FI and we're tying up some loose ends and moving to RE pretty quickly.

So to recap our choices were:
1. Work 5+ years longer to fund our home.
2. Live in the same location in a much smaller and less fancy place and be FI within a year.
3. Buy a bigger place in a cheaper area.

Ask me in another year if it was worth it in the end but so far I'd say it feels like it was a good decision. I still miss our old place a little but our new place is cozy and "enough" and feeling like home. RE is right around the corner which is pretty exciting. And the thought of giving up 4 whole years of our lives just to have a fancier house feels kind of silly to me now.

Let us know what you decide! I don't think there is a right answer but I know having some examples of what other people have done can be handy.

SIS

[Cranky]

I think you need to think seriously about what activities you are looking for - and do you see yourself wanting the same things in 25 or 30 years?

I love Denver - my husband is from there originally - but we wouldn't move back now (and we did have the opportunity) because it has grown so much and it seems so congested. No matter how beautiful the scenery is, you have to spend a heck of a long time in the car just to get to the grocery store. It's not for us.

Really, every place has "outdoor recreation activities" if that's what you want.

We live in a very inexpensive housing market, and the cost of living is pretty low in general. We like to garden, so we are happy that we can have a big yard for cheap. We have a great park system and wonderful libraries. Public transit is minimal, but frankly - it doesn't cost much to run a car.

But I know plenty of people who boat, who ski, who ride bikes (or horses). We don't have a lot of mountains, but you can be in the mountains with a few hours of driving.

Rust Belt Ohio is definitely not someplace people are generally eager to move to - but low, low housing costs offer an awful lot of freedom.

[aFrugalFather]

Definitely we are in a HCOL area as well (Bay Area, CA).  If not for the mortgage we could probably FIRE, but luckily my wife enjoys her work and finds it rewarding so we can use that income to pay down the mortgage.  We could probably live in a variety of LCOL places but I like that our kids are getting to grow up here where there are a variety of different cultures and people.  Not to mention the weather is spectacular most of the time.  I don't know any other places that has a variety of diverse cultures and are also affordable to live?