Incomes and cost of living
 

I see a recurring theme in some of the baseball threads. And it seems there’s a lack of grasp on how different the costs of living in various areas of the nation are. I think it may be helpful to explain things. I have less experience in the middle of the country and while I know things can be less expensive, I don’t really want to make assumptions for others so I’ll use the examples I know which are socal, Las Vegas, and Phoenix.

The extent of my knowledge in Phoenix is based on extended family members, and also a few people I grew up with who moved there. Middle class jobs can afford to buy nice middle class houses. That is a family of four income of say $80-150k a year buys what you would expect it would. Although they do currently have a rising cost of homes issue.

In Los Angeles proper, it’s expensive. I live in a nice suburb, 16 miles south of Downtown LA. While there was a small window between about 2009-2012 where homes in some LA suburbs were affordable to middle class individuals, I was going through a life threatening illness and wasn’t in a position to take advantage. Anyone who did came out really well. As it currently stands I rent a stand alone apartment with its own yard, no shared walls except our garage and the front homes garage are both under us, it’s own very large garage, and the area is safe and has well regarded schools. It’s smallish…about 950 sq ft with 2ba/2bd. I pay $2300/mo and that’s lower than similar places. In fact the 2/2 traditional apartment we moved out of three years ago rents at $2500/mo now.

I couldn’t possibly afford a house in the area nor any decent townhome. The townhomes start around $700k. The house about 5 down from us is a 1050 sq ft nicely renovated 3bd/1ba and just sold for 1,049,000.

A co worker lives in an equivalently nice inland suburb about 36 miles outside of downtown LA. Their family income is around $100k and going up each year by a decent amount. They owned a small townhome nearby, sold it, and took the profit to buy a modest and dated 3/2 house that’s about 1600 sq ft. $740,000. They are squeaking by and would have never been able to save up the 20% down otherwise. To place in perspective, they had to take out a loan for medical bills incurred treating a ill pet because they didn’t have a few thousand saved.

I currently pay about $7k a year in state taxes. My family has an income that would be upper middle class in a large portion of the country. In Los Angeles we rent with zero hope of ever buying.

Now Las Vegas…home prices have gone bonkers there. A friend bought his for $125k in 2009. It would now sell for around $380-400k. Still those prices are music to my ears. And no state income tax. This is wife and my retirement plan and the only question is if prices keep rising will we have to consider a townhome instead. Gas is about $0.75 a gallon less and cheap entertainment options are plentiful.

Anyway point it, the cost of living is crazy different and people that post here are from all over the country. Chris Kaman, former Clipper center, was from northern Michigan. He signed a large contract one year and bought his mom a house and not much else. He still showed up to Clipper games in the same beater he drove in college. He probably lives off the interest of his savings and investments. But that’s a rare breed. Most people with that much money don’t live like that. I assure you a dude on a 1 million a year contract is doing only ok in Los Angeles. Money comes off to his agent, federal plus state tax is around 45%, his rents going to be at least $4-5k. He has travel costs to go back home and stuff. I’m not saying the dude is broke…far from it. But it’s not the gold mine lots seem to think of it. At the end of the day, he doesn’t see half that million, and normal living costs eat up at least $100k, and probably closer to $200. After that it’s a matter of spending habits, but we’re now down to $300k or so. The smart guys invest that and then make more.

I’ve oversimplified a bit, but that’s the fair gist of things I think.

It's interesting because I have this discussion at work alot. I'm in the electricians union, and we get alot if guys traveling up here because

1. They flock to big overtime jobs and we have them up here. I'm a fan of 8 and skate and get my 40 hours. But feel guilty leaving all the OT on the table so I do work a decent amount of it.

2. Their areas typically aren't flush with work so another reason they come here.

3. And the reason I'm posting this is that our scales all vary from local to local...this is probably the biggest reason they travel here. Up here we make 48.50-$51 an hour depending on where you're working. I worked with guys out of Alabama who make either high $20s or low $30s/hr it's a huge difference. But again take into consideration cost of living of illinois and Alabama. Our property taxes are absolute robbery up here. I think we still come out ahead vs what they make and pay down there, but it is largely relative. Now in California they make like $70/hr in some spots.

Anyways you make a lot of good points, it's certainly an interesting topic.

Cost of living in LA is insanely expensive but most jobs also account for that in salary.

My job in CA would easily be 2-3x what I make.

[QUOTE=jcardstore;17998734]Cost of living in LA is insanely expensive but most jobs also account for that in salary.

My job in CA would easily be 2-3x what I make.[/QUOTE]

Same. With the price of houses in California I chose not to move back after getting out of the Army. Currently live in a 4 bedroom 3 bath 3050 sqft house. Have a pool and can see the bay from my porch in Pensacola. Paid $313k. 4 years ago.

Mortgage, cars, student loans, yard maintenance, utilities, phones, groceries, gas, insurances, retirement, etc. It all adds up. Most of those cost more as you make more, and are fixed expenses.

[QUOTE=babyfaceposey;17998756]Same. With the price of houses in California I chose not to move back after getting out of the Army. Currently live in a 4 bedroom 3 bath 3050 sqft house. Have a pool and can see the bay from my porch in Pensacola. Paid $313k. 4 years ago.[/QUOTE]

That sounds like a nice setup.

This is all relative to your entry point as well. No way my wife and I would be able to afford a house in our neighborhood in the current real estate market. We know a doctor/lawyer couple who weren’t even competitive on their offer for a house in our neighborhood just a week ago. 20% over asking getting blown away by multiple 30% over offers, insanity. Their income is most certainly greater than ours but they are struggling just to find a place.

Location: San Diego

I have a great home, 4B-3Bath, office and 600sqft of finished basement. It's actually too much room for our needs (2600sqft total). Mortgage is a hair over $1K per month. Taxes and insurance bring it up to $1600/mo. I'm 20 minutes outside of Columbus, OH.

We bought this home 8 years ago and I was able to be the sole worker at home with a regular trade skill job for the first 3 years or so. I'm also retired military, but that pay doesn't get touched for expenses like these.

Since then, any job I've had requires a monthly medical insurance payment (to the tune of $500+/mo), and the monthly property taxes and insurance have almost tripled since we bought it in 2014. I had no monthly health insurance deduction through work when I moved here from CT, but like I said, it's $500/mo now.

We still do fine, but only because my wife started working full time as a teacher. She used to be able to freelance as a sub, and even worked full-time down the street at a Pre-K daycare/education center as the head of education.

What I'm seeing nowadays is that my wife and I are working full time (I've advanced into management/engineering) just to maintain a our previous lifestyle from less than a decade ago when I had the sole paycheck at ~$80K/yr.

This year will be the first in awhile that we're both full time, but it should be around $140K combined in central OH. However, we're not seeing the overall benefit when it comes to work/life. We're basically keeping up to pay for kids extracurriculars, utilities, insurance, and basic needs (gas, groceries, clothing, home improvements, etc.).

We have 1 car payment (almost done) and no student loans. 529CSP is at $400/mo default, but I throw excess at it 4-5 times a year.

I like to think I live reasonably, but why do we struggle a couple times/yr? We take one vacation every spring break and drive to Boston for family. Sometimes hit OK/TX for Thanksgiving or Christmas.

Hopefully this year is better. I don't think there's any going back after Obamacare mandates and the current inflation.

One of the issues with housing is corporations being able to buy up housing to rent. People can't compete with them.

You said Vegas is blowing up, your friends in Phoenix aren't telling you all. We bought 11yrs ago at the bottom, lucked out and got a house walking distance to the Biltmore, we paid $169k for a 4/3 2000+sqft. Mortgage is about $1100. Smaller houses in the neighborhood are selling for well over $500k, I know its not 100%, but Zillow has us at $640k. We would probably be really tight if we moved in now. A few years ago we were considered Lower Upperclass, with an income around $160k between my wife and I. A lot of people moving in from CAli, and as someone else mentioned, big business moving in.

So luckily we got into our house when we did, between the 1 car loan and mortgage we have less than $90k in debt, no student loans anymore. In fact today or tomorrow is the 11th anniversary of closing on the house, we refinanced after 1yr from a 30yr to a 20yr and payment went up a whole $20. So just 10yrs left

Houses have gotten stupid here too (not like in CA but certainly relative to median income). I've stopped looking but when I was, anything decent was $300k. I can't afford that nor can I afford the down payment or closing costs right now.

In the end, I may talk to my boss about working remote 3-4 days a week and look for something up near Bangor...it'd be a 2 hour drive when I have to come to the office but...meh...whatever.

The Bay Area is ridiculous. Unless you're working in a top-tier tech position, have help from family/inheritance, or come from wealth, good luck buying a decent house in a decent neighborhood.

Even making 6-figures with no debt and good investments, even a 3BR is largely not affordable in many cities around here for me. Unless I want to move to the Oakland/East Bay side of the Bay, which I do not.

[QUOTE=jeg2315;18000562]The Bay Area is ridiculous. Unless you're working in a top-tier tech position, have help from family/inheritance, or come from wealth, good luck buying a decent house in a decent neighborhood.

Even making 6-figures with no debt and good investments, even a 3BR is largely not affordable in many cities around here for me. Unless I want to move to the Oakland/East Bay side of the Bay, which I do not.[/QUOTE]

Remember a year or two ago a picture of a condemend home on small lot selling for close to a million in SF because it was near the ocean.

Yeah, the Bay Area is ridiculous. 2 million MINIMUM for an OK house in a decent neighborhood. We bought in 2010 and our house has nearly tripled since then.

Bought a Phoenix condo (midtown) for $95k in 2012. Sold it last year for $280k. Moved into a Tucson house (foothills) 1800ft2 on an acre in 2019 for $330k, older house (60yrs) needed new plumbing, I’m not jazzed about the foundation, similar homes are going for $450k now. The neighborhood is cool, everyone is on an acre, great walking, cactus, palo verdes. Easy bike ride downtown (7 miles). Home Depot is close, 5 minutes, it was like a 30 minutes drive for me in Phoenix. Tucson has underwhelming restaurants and activities compared to Phoenix (which is an underrated food gem) I mostly miss riding my bike to Suns games (the Suns were terrible and you could walk in for $10) and cruising downtown. Tucson is a natural treasure however, sunsets, arroyos, surrounded by sky islands. From a desert born person, I still find it nuts that I can takes a long lunch from work and in 25minutes hike Madera Canyon, a forest of oak, pine, black bears, creeks and rare birds. I’m in a weird spot because maybe the cost of living has gone up in Tucson but Tucson is much less than Phoenix so my day to day hasn’t changed in the last 10 years. We lucked out an make more money here than we in did in Phoenix, tambien. Really, the big change is card prices have shot up, so I don’t buy much anymore :(

Thanks for all the input this far. Housing is most every ones largest expense so it gets the attention, but I really appreciate hearing all the other factors too.

I agree with the sentiment echoed a few times where a nicer living is just keeping up, not giving anyone a life of luxury.

For other reference, I haven’t had a car payment in a few years. We drive a 2014 Ford Escape and a 2003 Infiniti g35 coupe. I could buy a new car if needed, but as long as the two cars run ok, I don’t really want to.

Not trying to pry (feel free to PM if you'd like) ... when you say "My family has an income that would be upper middle class in a large portion of the country" ... what is the range on that?

I live in an area with a very low COL (relative to the rest of the U.S.), but it's growing rapidly and has already experienced a significant shift just in the last 2-3 years.

The housing market here has exploded. I was looking at lake houses and waited to long. The same size house I was looking at a year ago is now more than double the price.

Four-person family here - dual income, making $120K a year (I teach, and my wife is a development director for a large community center). In Idaho, we pay property, sales, and income tax.

We moved our family to North Idaho and bought a house in 2012 for $150K - nice clean place, corner lot, 3BR/2BA, 1200 SqFt. Lived there six years and made some improvements. Kids kept getting bigger, so we sold it for $300K the first day before I even really had it listed.

Bought a nicer/newer home about a mile and a half away for $350K in summer of 2018 - 4BD/4BA 2900 SqFt - bonus hobby shed (200 SqFt), amazing yard probably 40-50K in landscaping (granite walls, fountain, etc.), and a really great location. We bought from a relocation company and whoever they used as their realtor undervalued the house a bit.

Houses around us are now selling $600-$650K easily because of a huge influx of people from other areas (Cali, Texas, Seattle, etc.) It looks like we're going to have to move this summer to get closer to medical treatment for my son - so hopefully we get that $650K plus for the house.

I just sold my house literally yesterday… for $100K over asking for a family from AZ that is relocating

To them? Probably a steal

To me? Thanks

Its crazy right now. My wife and I make a combined 144k and are middle class in Md. Some states we would be almost rich. others poor. We bought our house in 2012 For 229k And we are refinincing right now with a cash out to do some nice stuff to our house, and it was appraised at 376k. If I could retire right now I would sell it, and move to a cheaper state. It cant stay this way forever.

[QUOTE=asujbl;18001358]I just sold my house literally yesterday… for $100K over asking for a family from AZ that is relocating

To them? Probably a steal

To me? Thanks[/QUOTE]

Congrats! Are you upgrading/downgrading locally or relocating?

[QUOTE=callou2131;18001387]Its crazy right now. My wife and I make a combined 144k and are middle class in Md. Some states we would be almost rich. others poor. We bought our house in 2012 For 229k And we are refinincing right now with a cash out to do some nice stuff to our house, and it was appraised at 376k. If I could retire right now I would sell it, and move to a cheaper state. It cant stay this way forever.[/QUOTE]

I hope it doesn't stay this way forever. The lake house I just looked at is listed at 1.9 million and they won't even entertain lower offers. I checked property records and the same house sold in 2018 for just north of 600k.

My wife and I are looking into selling ( So. CA) and moving to a state that is more in line with our way of life. We owe about 400k and we could sell it for about 850k. We are driving to Utah This Thursday to look around (she has some family there but we are not LDS). We are also planning to visit the Nashville area in late March and would also be interested in N. AZ if possible. She's a teacher and I'm a civilian employee with LASD. Our youngest is graduating HS in June so it seems like the perfect time to explore our options. We have talked about it and we both are not desperate to move but if things look better elsewhere we will probably go for it.

[QUOTE=nman84;18001440]Congrats! Are you upgrading/downgrading locally or relocating?[/QUOTE]

Upgrading but literally 2 streets over. Just a better lot and a little bigger.

Long story but we lucked into a house my wife had been eyeballing when the owner, who is a golf buddy of mine, wife got relocated to Florida. His kids are already grown. We’ve been joking for a year, he’s been commuting to FLA randomly, about my wife wanting it

Suddenly 6 weeks ago his wife wanted him there full time to buy a house. So it became more than joking around

So we sold without realtors and just got it done

I probably wouldn’t have paid what it would have went for on market

So we got lucky and then made some good money on the current house