Housing costs ruining my RE plans?

[ERhoosier]

Believe it or not, stocks and houses will come back to earth. When have they not?

I've lived in the same area for 30+ yrs. Housing costs have NEVER dropped, although the rate of price increases has fluctuated.

 

[Koolau]

I checked the produce price index by state and the retail prices don't seem much different in California compared to the other major cities listed - Produce Price Index.

Healthcare by state seems pretty similar according to this chart, with California looking to be in the middle of the pack - Healthcare Costs in All 50 States Ranked (businessinsider.com)

Gas prices are higher here. I checked the price of Costco gas in Phoenix on Gasbuddy and there was an 87 cent difference, with our local Costco being higher. So for us that would mean a couple hundred extra dollars a year on gas expenses.

We get a lot of retail and grocery staple purchases online from stores like Amazon, Walmart and Costco and I don't think any of them charge more based on state.

Your personal costs may indeed be higher in California, but for people like me who get gas and shop at Costco and eat out with coupons, we couldn't see any big savings by moving, except for housing. Our relatives in a more rural area actually pay more for most goods and services due to a lack of price competition, like only one big grocery store close by.

I can't vouch for your evaluation of Cali prices in general - sounds reasonable BUT where you CAN save a LOT of money in MANY states is on taxes. We did it by accident. Some folks actually plan to lower their taxes just by moving. All else being equal - and, yes, I know all else is rarely equal - you can save 10% or more JUST on taxes by changing states. Most likely, you'll find lower housing prices in those low-tax states, though we did not here in the Islands. YMMV

 

[Markola]

Figuring out what the herd is doing and then doing nothing for a while or doing the opposite myself usually works out pretty well financially after a few years. It’s the FOMO moves I usually regret.

 

[daylatedollarshort]

All I can say is my personal study using specific items we buy frequently had very different conclusions. Anyone considering a move to another state should do their own personal study and confirm what prices will be for the major things they consume/purchase rather than relying on published indices. Just like the CPI may or may not reflect our personal rate of inflation that we are experiencing due to differences on what’s included. YMMV

It is pretty easy these day to look up individual prices online on sites like Gasbuddy, Instacart, Chili's menus by city, etc. For health insurance, our prices are on Covered California. For state income tax, the state has a tax tables and an online tax calculator here, which is what I used to get the numbers in this post: Tax calculator, tables, rates | FTB.ca.gov-.

 

[Camas Lilly]

Similar situation here. We are moving to Idaho, which has a slightly higher cost of living. (So is everyone else apparently.) All said and done, we expected to have $60-$140K mortgage. We have the property and the shop is going up as we speak upon availability of materials, delays, delays, delays.

Saving grace right now is I had already priced in a $35,000 price increase, I am still working and we haven't yet listed our current home, so the value is moving in tandem with most everything else, maybe except Idaho. Move is on for 2022, no exceptions. Have waited long enough.

We have choices. Order the home now since construction time is 1 year out, sell next Spring and see what we can afford at that point or put most of our things into storage and move into our single wide mobile home on another property in Idaho and wait. We do have some flexibility since we are ordering a modular home. I have already stepped down on the floor plan and options with something I would love just as well, but still expect prices to be high.

I would love to just sell our home and move into the mobile home, saving hoards of cash every month, but also risk the uncertainty of the housing market, stock market, interest rates, etc. etc., not to mention I would no longer have a good piece of real estate appreciating anymore. Will home prices stabilize and come down? Will interest rates hold? Who knows? The scary part is, what if everything keeps escalating past two years from now and we get stuck in the middle? In one sense, bite the bullet makes a lot of sense, but that cash is really calling too, maybe a couple thousand a month.

We previously haven't set plans on the mobile home because of our pets (we need zones), but the way we are going right now, we will be going down on that count soon, so that issue should be resolved by the end of the year.

 

[Music Lover]

No one here has said California doesn't have a high COL, though most of that is due to housing. My only point in this thread was that most of the middle class here, and those making up to $200K, do not have high state income taxes relative to other states. The income tax is progressive, so if you and your friends are wealthy, you will pay more in state income taxes. That is by design and how California has a $75B surplus this year.

There's no such thing as a surplus when the total debt is approaching $600 billion.

 

[daylatedollarshort]

There's no such thing as a surplus when the total debt is approaching $600 billion.

Compared to other states, per capita debt while isn't the best, isn't the worst - https://worldpopulationreview.com/en/state-rankings/debt-by-state. If your main or only criteria for where to live in retirement is debt load, then maybe you want to rethink Canada - https://www.fraserinstitute.org/studies/growing-debt-burden-for-canadians-2021https://www.fraserinstitute.org/studies/growing-debt-burden-for-canadians-2021

Under a state law passed previously, with the surplus over a set thresholds, middle and lower case families should be getting state tax rebates this year totaling $16B.

 

[someguy]

+1

While I am working, I would pay less state income tax in Cali. than I do in Wisconsin. (AGI ~$150k.)

Of course, maybe my salary would be higher in Cali!

It must be differences in deductions? ADP take home calculator shows $4,145 less take home per year in CA vs WI on $150K. The difference jumps to $8,410 for CA vs WI-neighbor IN.

 

[daylatedollarshort]

When we decided to move to California we didn't even consider what the state income taxes were, though it seems to have worked out for us, with our deductions and income levels. What we did look at were things like number of parks and weather:

Parks by state
U.S. States Ranked by State and National Park Coverage (playgroundequipment.com)

Pleasant weather Map
Clever Map Reveals Which Cities Get the Best Weather | WIRED

I told DH I didn't care if I had to live in a yurt, I was tired of living in a place with awful weather and nothing to do.

 

[Koolau]

When we decided to move to California we didn't even consider what the state income taxes were, though it seems to have worked out for us, with our deductions and income levels. What we did look at were things like number of parks and weather:

Parks by state
U.S. States Ranked by State and National Park Coverage (playgroundequipment.com)

Pleasant weather Map
Clever Map Reveals Which Cities Get the Best Weather | WIRED

I told DH I didn't care if I had to live in a yurt, I was tired of living in a place with awful weather and nothing to do.

I guess the Pleasant Weather folks forgot that Hawaii was a state but YMMV.

 

[Out-to-Lunch]

It must be differences in deductions? ADP take home calculator shows $4,145 less take home per year in CA vs WI on $150K. The difference jumps to $8,410 for CA vs WI-neighbor IN.

I have no idea what the ADP calculator is. I suspect the discrepancy is because I am speaking of MFJ, and I didn't think to mention that.

I am using the Case Study Spreadsheet from Mr. Money Mustache (https://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/ ). On $150k AGI and filing MFJ, Wisconsin state taxes are $7731, and they would fall to $7547 in California.