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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: electra who wrote (4860)	8/30/2002 11:45:12 AM
From: GraceZ	Read Replies (3) \| Respond to of 306849

Choosing a place to live has a lot more to do with what you want out of life than what home prices are doing. You may be in the best place already, I'm assuming your rent is considerably lower than what it would cost you to own where you live for a comparable home, right? If you don't know this, it'll be good for you to try to figure it out. Compare the cost of renting with owning a comparable property. Make sure you figure in the tax savings. Since you seem to think that salaries are lower where you are, what you want to do is figure out is what is your real per hour wage and then apply that to your rent. In other words, if your real income (after subtracting the cost of working) is $15/hour and your rent is $500/month, than you are working 33 hours a month to live where you live, less than a quarter of your working hours if you have a forty hour a week job. If its close to that, you're in a better place than most people who live in most metro areas. As a comparison, I've lived in places where I could pay my housing expense with as little as 10 hours work and as many as 50. You could find a place where the same job might pay you more per hour, but then the rent cost is higher as well and then you might have to figure in a half hour commute each way with its attendant time, gas, auto expense reducing your "real" compensation. What I always suggest people do if they are thinking they should live somewhere "better" is to make a list of those things that are important to you in the order of importance. This seems like a silly thing to do but its a really good exercise because it helps you measure those things that can't be measured in dollars. Here's my list from years ago when I went through the same exercise: 1. need to live near major metro area for my work 2. want to live near (within 3 hours) of either ocean 3. want to live near at least one close friend or family member 4. want to live near an area that has a lot of open undeveloped space for me to ride my bike, run and hike 5. want some sort of cultural center within a few hours This list had me choose Marin County in California which is one of the least affordable places on the planet! Then I added two other things, be near my future husband and live somewhere I can afford to own a house it took me back to Maryland. If I were to do this exercise again today I'd come to the same conclusion. Everyone's list is going to be different. See how far down the affordable house is? It didn't even make the list the first time. The way I afforded to live in an unaffordable place was I had a roommate and drove a ten year old car. For entertainment I chose things that were essentially free, biking, hiking and running. Oddly enough, the pay I received for working the same job in this expensive area wasn't any higher than what I received back in Baltimore, an area where living expense is exactly half that of the Bay Area. So now I live here and visit there. With the money I save I can usually spend a nice couple of weeks visiting out there every year. To sum it up, maybe its cheap to live in Peoria but if you are miserable living there, so what? If where you live is beautiful but you have to spend half your time working at a job you hate you should consider moving. How important is "owning" the house to you? It could be more important than the beautiful environment. Certainly the interior of Maine is no where near as expensive as the coast but do you want to live there, are there any jobs? New England has gone through some tremendous real estate busts. My sister was a commercial real estate agent in Portland back during the last big boom and bust and it almost cleaned her out after years of riding high. So maybe you just need to be patient. Good luck.