This study is meaningless because it considers only the cost of buying a home, and not the total cost of housing or the cost of living. Specifically, it omits property taxes, state income taxes, and state and local sales taxes.
Several of the "most affordable" cities are in Illinois, yet here in Illinois we are losing population rapidly. The reason is that the tax burden is the highest in the nation. Property taxes in particular are out of control. That's why houses are cheap: buyers have to take into account the fact that they have to pay a significant percentage of the value of their home to the government every year.
Across the border in Indiana, there is a 1% property tax cap. In Illinois, property taxes average 2.5%, and there are some communities where it runs as high as 10% (mostly south-side Chicago economically depressed townships).
My advice: don't come here because you think housing is cheap. It ain't.
Exactly this. As a lifelong Illinois resident, I was quite shocked to see Illinois as #5 for home buying affordability. That is CLEARLY not home _owning_ affordability (mostly due to property taxes as you pointed out).
eta: We are also leaving IL as soon as our new house is built in NC.
Someone posted this comparison[1] the other day, which I found to be valuable. Tax burden by state. Too bad the article didn't account for this with their data.
We really need more integratable open data sources so that people can do these kinds of mash-ups easily themselves. Maybe I want to sort regions weighted by home prices, distance to a ski resort, least light pollution for stargazing, and cheapest gas prices. All these data are out there, but you need to be a GIS wizard to mash them up.
It omits services which might be provided by the government in one area but are privately provided in another. It omits whether there’s anything nearby that anyone wants - jobs, shops, etc. whatever go move to the Midwest and be bored I guess the article is saying.
Is there a point in measuring affordability relative to locals’ purchasing power, when the question the article raises isn’t how many people who already live there can afford homes, but rather where you should move to buy a home “for cheap” when your job has suddenly become mobile?
I would think absolute home prices (plus cost of living, minus any local tax incentives for moving to the state, etc.) might be a more interesting metric here.
Only useful for devs and other digital people. Not useful for a construction worker. If I were Price Economics I would keep it general as there are many (knowledge) workers not being able to go remote (or wanting to go remote).
Not quite true: a lot of non-tech jobs can be done remotely these days as well. E.g., my daughter works in event marketing management and her entire team works remotely.
It is a tech company, so they are comfortable with this, but a decidedly non-tech job.
Absolutely spot on re hands on work, e.g., construction, plumbing, electrical, other trades.
One aspect of geographical arbitrage that I rarely see discussed is what it's like to live in a community as someone with a high-paid job that's very different from your neighbors.
From that perspective, I like this take on it - if I'm going to be able to easily my afford my home, I'd like it if the same was true for my neighbors, even though most of them have more local, less tech-oriented careers.
There are also cities where the majority of the people there at any given moment aren’t actually employed by the local economy of the place: the estate communities of the northeast US, where everyone is the owner of some corporation who moved there to get away from people; tourist towns where the tourists outnumber the locals, with roughly all the locals employed in hospitality.
And there are cities where most everyone you’ll run into is employed by the local community, but doesn’t live there: agricultural towns where most people there at any given moment are temporary workers bussed in; “global” cities like Dubai which have roughly no local population, where most of the population at any time are there on temporary business visas; mining/oil-and-gas boom towns (though this last one tends to change, with the workers often settling into the area.)
It’d be interesting to see cities measured on what proportion of the people who you’d have as neighbours, are actually “attached” to the local economy. How much the city exists as an autonomous, self-sustaining entity; vs. being some state government or corporation’s loss leader for some project.
These are all really good points. I've mostly only lived places where I was "attached to the local economy" as you put it; I wish I had a better sense of what it's like to live someplace where you're not as locally enmeshed, and how that differs when your neighbors are or aren't in a similar situation.
Youngstown, the "most affordable place" quoted has decent weather (not California, but not a frigid tundra by any means), is close to major transportation hubs (40ish minute drive to 2 international airports), one of the most beautiful metro park systems in the country (google Lantermans Mill), pretty decent schools in the suburbs, and a burgeoning "hipster-crafts" scene.
It's exactly the kind of place I'd expect to start capturing some attention: in some ways the pandemic may be the best thing that ever happened to that region, because it forces a kind of reckoning around "what things are really _valuable_ in a remote- first world?". CA/SF are great.. but for a lot of people having a great quality of life _and_ having the financial security to pass more on to others or pay for things other than a house that costs 15x as much is a more fulfilling choice.
The Youngstown of 20 years ago: Struggling to deal with a newly disaffected working class, the new realities of a rising crime rate and the glimmer of its former "center of industry for the nation" self. Guess what? That's everywhere else now, too. Those problems didn't go away in Youngstown, but that region has had 40 years to deal with it and adjust and become resilient. Youngstown was a "preview" of what the rest of the US would become: Even down to its own version of Jim Traficant as president.
Is it better than it was? Comparably, it certainly is. Objectively? I think it's gotten better, too. It's not SF and it never will be, but you get a lot of time and space for your money there, comparitively.
I'm keeping my eye on the housing market around the area a little further out into the country.
Yeah I don't need priceonomics to tell me demand for housing (and thus home prices relative to income) is going to be much higher in coastal California than in small town Ohio.
Also, lots of other quality of life and expense factors to consider: schools, dinning/produce, jobs in your field.
Ultimately though, doesn’t the market just work this out? The areas where the most people want to live are the most expensive and visa versa. The trick is figuring out what matters to you and what doesn’t and then finding the cheapest place that offers what you want. With the obvious caveat that for many many people, being close to friends and family is a major factor in what they want.
Isn’t the price just the desirability factor (on average)? Would be interesting to select areas of desirability and find the cheapest areas that match those criteria.
I think the thing that's maybe novel, though, is that "access to high-paying jobs" has previously been a huge "chunk" of the desirability metric. Now take that away: Is it still worth paying 20x as much on a quotidian basis when two places have the same access to those jobs? Having spent time in both CA and Northeast Ohio: is California nicer? Would I pay maybe 20-30pct more to live there? You bet I would. 2000pct? Keep your needle-littered streets, I'll see you in Cleveland.
In a perfectly efficient market, yes. But many people will remain in one place to be by their family even if the price to desirability ratio is out of whack.
What is comfortable about traffic, smog and high taxes? I love California, lived there my whole life up until this past January but let’s not forget to take off our rose colored glasses.
Edit: drought, wildfires, income inequality on a huge level, horrible public transport, but there’s beaches, mountains and desert all within a days drive I guess?
Smog hasn’t been a thing in california doe a while. Traffic certainly is. High taxes are a tautology and can’t be factored in here because they are just part of the cost side of the equation.
If you are arguing that California is objectively undesirable compared to other places on the list, then how do you account for the demand?
Where do you live? Ever driven the 210, 91, 215 or 15 around the Riverside/San Bernardino area? Smog is absolutely still a thing. Bakersfield has the worst air in the US.
California is absolutely desirable and I never said it wasn’t. But your reasons for it being the top spots don’t jive with what people actually feel or think. A lot of houses are being sold sight unseen for cash, sometimes up to 25+% over offer, just to be rented out for a profit by someone from out of state the demand is propped up by this as well as normal migration in.
Bay Area doesn’t have smog. California in general doesn’t have smog. The cities listed in the report don’t. Obviously California has some places that are not desirable to live. Bakersfield for sure.
> But your reasons for it being the top spots don’t jive with what people actually feel or think.
Here you claim that people do not think the places with high housing prices in California have good weather, amenities, natural beauty and jobs.
> A lot of houses are being sold sight unseen for cash, sometimes up to 25+% over offer, just to be rented out for a profit by someone from out of state the demand is propped up by this as well as normal migration in.
Here you claim that housing prices in California are driven by out of state speculators buying housing as rental properties.
Is there any source for this claim?
It seems unlikely, given that rents are not keeping pace with housing prices.
Also if California is not desirable in the ways I said it is, why would people want to rent from these speculators?
Raleigh, NC area. My girlfriend has family out here and we decided to give it a try since we’ve started a family and couldn’t afford the space we needed for our son and extra for our second child when they come along.
Ended up buying a house for less than half what it would have cost in San Diego with a nice amount of land and about 20 minutes from downtown Raleigh on an average day. We lost the beaches and desert but still have mountains and lots of green areas nearby. My only complaint is I need to make California burritos at home as that’s not really a thing here (go figure) but we love it so far otherwise.
Housing prices are a big topic of conversation in other places as well: e.g., I am in Canada, in the GTA/Toronto. Things be crazy here—and most of Southern Ontario, and a whole bunch of other places lately (Maritimes going up AFAICT).
Yeah I guess if someone wanted to do that they'd have to work out some logistics, but it seems like a pretty good investment opportunity especially since the arctic is getting warmer.
I've lived in a very inexpensive city in Ohio. I'd rather pay more not to hear gunshots as I'm drifting off to sleep on weekend nights (and I lived in a relatively "good" section of the city). Death is even cheaper than cheap housing, but that doesn't make it a desirable situation.
(And if you have kids, you probably want at least halfway-decent public schools, which many of these cities don't have.)
Someone should mash this up with crime statistics to find the most peaceful cheap cities. They will probably be somewhere in the middle of Tornado Alley though.
50 cities and not one in CA. I live in a s*h*e in California and the houses are 700k. I don't know how you could pay that mortgage-- The area has been economically depressed for 20 years.
I'm not sure. The people (in the Bay Area) who had not over-extended themselves during the housing-bubble run-up hung onto their homes, did not put them on the market when prices were depressed.
(I was looking myself to move to a larger home in the Bay Area during that period and came up empty.)
In fact, many of those in the Bay Area snatched up 2nd, 3rd, 4th properties as investments from places like Las Vegas where they were practically giving away new homes.
When prices returned to normal (that is, everyone who had to foreclose had done so), then the expensive homes started coming back on the market. Basically, the wealthy could afford to sit out the market lull. There weren't really any excellent deals to be had in the Bay Area after the housing crash. There were still plenty of people with deep pockets showing up at foreclosure auctions and outbidding one another.
But back to the point — perhaps there is simply too much money, too much wealth in parts of California for the prices to ever really fall.
It’s intentional. At every level of government politicians have as avowed goal above the rate of inflation cost growth in single family homes. They make noises about affordability but that’s diametrically opposed to creating a windfalls for incumbents. Which side of that coin they invariably come down on is immediately obvious.
The one and only path to reduced housing costs runs through reduced homeownership. As long as a large majority of likely voters own the problem will only get worse.
Is there something equivalent to Nomadlist but for filtering places to live in? I don't know anything about Youngstown or Jackson but based on Flint's reputation I imagine there's probably a reason it's a cheap place to buy a home.
I don't see Des Moines, IA on the list but it pretty routinely ranks highly as a good balance between affordable and desirable (it's safe, there's a decently vibrant tech/startup community, lots of big insurance/financial services/agtech companies that provide a stable foundation of high-paying jobs, and it's big enough that there are things to do -- downside is the winter weather)
https://www.dsmpartnership.com/news-media/rankings
But I'm sure that I'm only aware of DSM because of my family ties. Would love to hear what other undiscovered gems there are. Eg I've heard good things about Chattanooga.
This may come across the wrong way and I realize there's likely no benefit to saying it but:
These aren't undiscovered gems, they are nice places to live and have always been that way. They are places that used to be called flyover, backwoods, etc. They are nice because they were ignored. They are liked because they don't have the problems of the places people are flocking from. It seems that the coasts have found out the interior isn't all outhouses and dirt roads. It isn't that it is a discovery, it is knowledge gained of an existing fact. /rant (but not really apparently)
Arkansas is a great example. It is a trope to make fun of it and look down on the state when, mostly, it is absolutely gorgeous. There's some flood lands on the east but it is called the Natural state for a reason. Northern Mississippi is rolling hills and Oxford is beautiful. Many of the gems you're looking to learn about are likely too small to make this list, or are a combination of smaller towns making a slightly larger area. Then you have these historically depressed, shunned states being piled on because they are now seen as gems, it is a power imbalance that feels a little intentional.
You mentioned Chattanooga so you'd probably be interested in
Savannah (GA or TN)
Oxford MS (4 of the biggest, best fishing lakes right there)
Anywhere in Maury / Marshall County TN
Anywhere in middle TN, especially Cooke/Crossville (TN tech is there) except for the places already "discovered"
Knoxville / Maryville
Johnson City / TriCities TN / Bristol VA
Asheville / Boone, NC
Huntsville AL (they have rockets!)
Surrounding LittleRock AR (or for small town Heber Springs, Mountain View)
I feel old and fuddy-duddy now, get off my lawn and all of that stuff. I really like new people and new influences, I'm glad others appreciate what I have for so long, it just hurts a bit to have the continual view of condescension that comes from things like "found, discovered, etc" it implies that it needed approval in the first place when, in fact, it has been fine all along.
This was way too-ranty and possibly exclusionary, I absolutely love Tennessee and most of the South in general (looking at you Kentucky), probably to a fault. I want my kids to grow up and have access to all that I did. Land is being bought in droves, it is leaving, it is noticeable. Access is being restricted. There's a lot of great conservation work and, admittedly a lot of newcomers who help more than existing. It just feels like a bit of a race at times.
> They are places that used to be called flyover, backwoods, etc.
As someone born, raised, and lived almost all my life in the vicinity of NYC—-this mostly isn’t us.
I’ll admit there’s some jokes, but it’s good natured. Somewhat like how most Americans think of Canadians. Maybe not close family, but cousins.
Rather, the true bitterness and nastiness comes not from native coastals but people that are from those places in the middle and left. That’s not to say all transplants are haters but almost all the hardcore haters are transplants.
Having done the drive from Little Rock to Vicksburg a couple of times, it isn’t that nice in the southern part of the state, it is basically the same flat farming Walmart every 10 miles as northern Louisiana. There are some nice places the further north you get. And north east Mississippi is like Kentucky, but northwest Mississippi doesn’t offer much beyond some delta charm.
Agree to disagree, I like the subtle hills, forests, and big lakes, then again I like the mountains, the beach, marsh, or meadow. My post was definitely a bit dramatic but I'll lead it to remind me to not post on the internet so much. :)
There aren’t many subtle hills on that part, if any at all. The delta sure, but you go west of the Mississippi and it gets flat, kind of depressing. Things don’t get nice until you get to Little Rock and get closer to the ozarks.
Lived in Youngstown for a while a terrible place. Lot of murders and most every building is abandoned or a bar. It's an old steel town and then steel went overseas and the jobs didn't.
It was a hard lesson Youngstown learned for 40 years. Now the rest of the country is learning it and Youngstown isn't "recovered" yet, but it's doing a lot better. Ironically, the pandemic is maybe the best thing that ever happened to it.
I had my suspicions about this analysis and Flint and Detroit ranked highly definitely speaks to the limitations of ranking based on an income-cost coefficient.
I’ve been curious for a while as to why Boulder is so expensive relative to other places around Colorado, and surprised to see it so high on this list. Is it just one of the wealthier suburbs of Denver?
I wouldn't really call Boulder a suburb of Denver - it is definitely in the Greater Denver/Denver Metro area, but it is geographically and pretty culturally distinct.
Boulder has (or maybe more correctly, had) that same liberal college town vibe that places like Ithaca and Burlington are known for. It is nestled directly against the foothills of the Rockies which provides great recreation options with hiking trails literally starting in town (Denver is ten or so miles east of the foothills). Boulder is home to a pretty booming tech scene, so there are some very high paying jobs to be had, too.
As I understand it, the zoning regulations designed to keep the "small town" feel prevent much development. These zoning ordinances paired with Boulder being a highly desirable place to live mean that demand far outpaces supply, and home prices shoot up.
It's a wealthier suburb/exurb of Denver, it's up against the mountains so there are significant growth constraints, and the flagship campus of the University of Colorado is there, so there's a lot of permanent demand from both students and spin-off companies from the university.
College town. The wide availability of student loans helps to inflate housing costs around a university above the local market. Its similar structurally to Chapel Hill, NC in that way.
I heard a theory that college towns are desirable because of the educated population, but also they're designed to be compact and walker friendly, which is rare these days.
I’ve been mulling a theory that cost of living is generally the same wherever you go, it just changes from implicit to explicit costs and vice versa. As many have pointed out the “most affordable” on this list are high crime or bad weather so it actually has a far higher cost than your cash outlay. Nicer weather and low crime areas have a higher cash outlay because the implicit costs are lower.
It seems to me that this implicit and explicit balance change a lot faster than housing supply, tax policy, etc can keep up with.
For example, several metros in Texas growing 20% in the past decade vs Chicago decreasing in population.
The folks that took up residence in DFW this decade got to take advantage of a high explicit benefit and a stable implicit benefit. Maybe in another 10 years that turns into NIMBYism, intolerable traffic, decline of industries that previously supplied a lot of jobs... reducing the implicit benefit. But DFW won't be able to change its fortunes quickly enough to recover that great implicit/explicit balance in such a climate, and then it'll be the new California.
One way to look at it is an an arbitrage opportunity, where you as an individual or family can relocate much more quickly than a metro area can adjust to balance its implicit and explicit costs.
I'd love to see a list like this of the best place to live for you right now, based on the things you value implicitly and explicitly.
To some extent, but there are definitely regional differences. Living in Boston is just more expensive than living in Houston. Controlling for everything else, Boston just doesn’t have the land or labor available to build houses like Houston can. This makes it cheaper. Then factor in no state tax and generally reduced gov fees of Texas, and it’s a lot easier to have a higher quality of life (in the material sense) in Houston than in Boston. I do think this impacts a number of things, including diversity and reduced barriers to achieving success (Houston is the most diverse city in the country).
I feel like in the long run this balances out and that's part of what's priced into the COL.
Houstonians are in a boomtown getting a temporary advantage that could be offset in the long run, whether by industrial decline, climate change and severe weather, traffic, or some other factor.
Boston does have a Superfund industrial past to reckon with and a lot of outlying MA cities like Worcester, Lowell, Fall River are definitely not balancing out on the implicit/explicit scale by comparison to Boston.
What is the "core" of Houston that will retain its benefit when the tides turn?
Assuming by the tide you mean oil and gas. There was a saying that if you’re in Houston you’re either there because you’re sick or in oil. They’ve got a huge medical industry that brings a lot of value. MD Anderson has world leading cancer research. They’ve got Rice, U of H, and a ton of other schools that provide solid educations. NASA is still there. Thriving cultural district, incredible food scene. Shipping channel and port are the biggest in the Gulf (didn’t check, but I can’t think of others that would do more).
Anything you can want, from any industry, most likely exists within a 1 hour drive at a world class level. This is true of any big city, but I’m not sure that oil going away will just cause Houston to fold up and close shop. Houston has been through booms and busts before and I’d say they’re more ready to handle moving away from Oil now more than ever, and getting more ready every year. It’s a scrappy town that takes punches, puts in work, and helps eachother get back on their feet (See Hurricane Harvey).
If I had to pick between Houston and Chicago, I’d pick Houston any day. Much more livable city, a way lower tax burden, and it still feels like a place where anyone can make it - and that may be driving the diversity and immigration (it’s also a sanctuary city).
I agree. I think there is some analysis to be done looking at the cost of living versus different states tax regimes. For example, Oregon has no sales tax, are everyday items more expensive. Same for Florida, zero state income tax might cause price inflation. I am also reminded of this when ever I read an article that cherry-picks one dimension that shows place x is better than place y. I am suspicious, as you point out, that you pay in other ways.
The market pricing for explicit costs will be slow moving, for sure. Though I do think we are starting to see the increase in wildfires and urban crime priced in more than it was before as incidences increase. However CA gives you incredible access to nature with all the state and national parks, high sunshine which means less seasonal affective disorder, a higher likelihood to make a very high income. All of those implicit benefits show up in housing prices.
Contrast that to a midwestern city: the winters will probably give you seasonal affective disorder, your income ceiling is lower, you have to drive further or fly for similar access to awe inspiring nature.
IMO it’s a wash. Which taken a step further would show cost of living adjustments as generally bullshit but something businesses will try and do because they’re incentivized to.
It's not clear to me how "home prices" are defined here. If it's a mean, then these numbers would be a comparison of means to medians, which could be misleading. in that it would be skewed by heavy tails in homes but not in incomes. (Of course, I don't doubt that Hawaii and California will end up as relatively unaffordable regardless of how you calculate things.)
In addition to many issues already raised, there are definitely more hidden ones like Santa Monica, CA being less affordable than Palo Alto or even Sunnyvale.
Santa Monica is actually quite a bit cheaper, but the methodology compares ratio of local incomes to housing prices. Santa Monica is heavily rent controlled and over 60% of people living there rent and many have rents that are far far below the market. This skews affordability ratio the article is trying to use.
Compared to Palo Alto, Santa Monica is a bargain. According to Zillow, Palo Alto median home price is $3,226,001[1] vs $1,810,148[2] in Santa Monica.
Having lived in Berkeley for a few years I would say it is by far one of the nicest places in the USA to live. The food scene is wonderful, the populace is diverse, it’s very bikeable and walkable, and the natural beauty of the hills is breathtaking. If I didnt hate the USA so passionately I would have bought a home in the hills.
Thank all the baby boomers nimbys and the greedy tech bros for ruining california.
I would try to school you on everything that makes the bay area great, but let’s face it, hacker newsies are a group of republitareans who move there purely in a cargo culting effort to win the dot com lottery.
For every complaint you have, I’ve had 1,000 magical experiences you could never appreciate.
Please, i want everyone to be happy, and for most techies, you would be happier in Texas, New York or Florida.
Several of the "most affordable" cities are in Illinois, yet here in Illinois we are losing population rapidly. The reason is that the tax burden is the highest in the nation. Property taxes in particular are out of control. That's why houses are cheap: buyers have to take into account the fact that they have to pay a significant percentage of the value of their home to the government every year.
Across the border in Indiana, there is a 1% property tax cap. In Illinois, property taxes average 2.5%, and there are some communities where it runs as high as 10% (mostly south-side Chicago economically depressed townships).
My advice: don't come here because you think housing is cheap. It ain't.