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Comment by twblalock | Hacker News Reader

Yeah housing is cheaper in other areas. But everything else costs the same. An iPhone or a Honda Civic costs the same everywhere in the US.

Leaving the Bay Area will lower your housing costs, but everything else you buy will take up a larger percentage of your income than it did before. Plus you'll be making less money -- in some cases, a lot less. Run the numbers and you might find out that even after paying for a Bay Area mortgage you would have more money in retirement in California than you would in a cheaper place.

Don't move for cost savings. The economic benefits are not as strong as they appear to be. Only move somewhere if it's actually where you want to live.

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No, not "everything else". Restaurants/coffee shops/clubbing may be cheaper too, children daycare too, even some groceries. And taxes, as already pointed out.

Just an example calculation: If you can save $1000/month on rent and another say $150/month on other living expenses. that's $13800 annually. That's about $138000 annually net salary right now ($124200 after the cut) to break even, or about $180K-$210K pre taxes and pre cut, living in San Fran. Now, if you move to an area with lower taxes that break even point will only go up.

And don't forget car insurance on that Honda Civic. That is not the same everywhere in the US.

And registration fees too! My annual registration fee in CA was ~$900. In Florida it’s now ~$35.

Insurance dropped from $120/mo to $50/mo.

California has registration fees on top of the high gas taxes? I thought they just rolled the registration fees into the gas tax.

Sure, but you generally don't buy a new iPhone or Honda Civic every month, while your mortgage/rent is due every month again.

Furthermore, it is not only housing cost that is lower outside major cities. Your hairdresser also has higher rent in a major city, as do her suppliers. There's more traffic so goods take longer to deliver. This is besides the fact that other states/places can and often do have lower taxes on goods than major cities. So your iPhone might actually be cheaper as well.

Everything is more expensive in a major city because everyone has more expenses and passes those on.

Sales taxes generally go up in states with low income taxes fwiw.

A lot of the high tax states have high taxes in multiple categories. Moving to a high sales tax, low income tax state might actually "reduce* your sales tax.

NYC, where I live, has an 8.875% combined sales tax. And a high income tax.

Texas, meanwhile, has a maximum combined rate of 8.25% and no income taxes. High property taxes.

Moving to Texas would cut the sales tax I pay.

People finance their cars, and increasingly even their phones these days. You DO make monthly payments on your car (and sometimes your phone)

You have to consider the trajectory. SF is already a dumpster fire, if enough affluent people leave, property prices will tank and you will be paying off a mortgage for a larger sum than what the property is worth.

Meanwhile, all these affluent people have to move somewhere, the properties in these places aren't going to stay cheap forever. So you can get a cheaper mortgage in those places to pay off a property that will rise in value.

Of course, that's all speculation. Prices in the "good places" are already high anyway, if you really want to strike a bargain you have to buy into the places that are still up-and-coming.

Have you seen SFH homes prices in SF and larger Bay Area prices ? It is through the roof even in pandemic. Don't believe some random media quotes

The stock market hit all time highs during the pandemic while the economy is in shambles. Why? Because there's a lot of cheap money chasing those assets, and it's going to stay that way for a long while. Therefore, those house prices may still nominally rise or at least stay stable, even while they're losing value.

You have to look at it in terms of opportunity cost. What else could you have bought for that money? If prices rise in SF only because of inflation, prices rise even faster in those places where there's a real increase in demand.

> SF is already a dumpster fire,

I didn't notice this when I went there last year, is it a post-covid thing? What happened?

They must've given you the Potemkin village tour.

I did see some homeless people, but overall it still felt like a nice place. Of course I avoided the tenderloin and other dodgy areas (and this time I didn't use the BART, unlike previous times).

> if enough affluent people leave, property prices will tank and you will be paying off a mortgage for a larger sum than what the property is worth.

Or, as California is a non-recourse state, leaving the bank holding the bag, paying only taxes on the unpaid debt.

> Meanwhile, all these affluent people have to move somewhere

Well, they actually don't have to move, and if they do it may not be to where you predict.

The cost of housing absolutely impacts local prices across the board for basic reoccurring costs like food, fuel, childcare, taxes, etc. This is different and arguably more of an impact on budgets than one-time costs like a car where you can (and people often do) travel to make the purchase if you are able to save money.

I was paying $70-80 to fill my tank of gas in CA, and now am paying $35 in SC. I took my son for sushi the other night, and we feasted and I had two glasses of wine, and the bill was $50 instead of at least $100 in LA, so yea, everything is way cheaper when you aren't paying to live in the "dream" world of LA.

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