Young people moving out of the major cities to buy homes
by Zain Jaffer
For many new fresh graduates and young families, the glamor of the big city is slowly fading away and being replaced by a new goal - to move back to smaller growth cities with lower cost but surprisingly better quality of life.
Take crime for example. While some may argue whether crime has increased or decreased or is just better reported, the sight of large uncontrolled groups of young people shoplifting from downtown urban stores with impunity and no police to stop them has become commonplace. Formerly upscale districts like Union Square in San Francisco are increasingly seeing lots of boarded up commercial real estate space, homeless people on the sidewalks, street crime incidents, and drug use.
The cost of living is another factor. Most major US cities have very expensive cost of living, whether it be food, clothing, or shelter. With the current high mortgage rates running in the 7-8% range as compared to around 3% a few months ago, most young people are finding it unaffordable to buy a new home, especially with current market prices in the major cities and nearby suburbs.
Another are new social factors that have come into play. Take for example a proposal from a California city council that would make it illegal for parents to have a say in their children’s desire to have an irreversible gender change operation. Many more conservative parts of America might reject such a clause outright, but it is happening. Many young people with families do not want that kind of scenario to contend with.
Rent is an expense. You do not build equity as you pay rent. If you’ve been paying rent on your apartment for years, you have a right to that living space. That’s all. While owning a home might reduce your disposable discretionary income more than a rent expense for the years that you are paying your mortgage, you are accumulating your personal wealth as you pay it off.
This is why for a lot of young people, the affordability of moving to smaller cities in the US where houses are cheap, where jobs are plentiful or growing, so that they can afford to buy a home, is increasingly becoming popular. Add to that the higher mortgage rates which makes it even more expensive now to buy a house on debt.
Even if your salary is higher in the big cities, if your spending is also higher and you are unable to buy a house, your counterpart living in the smaller cities may actually be building more wealth than you, and raising their family in a better way.
You want your memories of your family to be of them running or walking in parks, going on nice picnics, lunches or dinners with you. Not waiting in some ER or police station because of some street crime like a mugging, burglary, or home invasion. You cannot undo memories that certain places give you. It stays with you for life.
Plus with Work from Home benefits from many companies, employees are now increasingly able to fulfill their job needs anywhere they are. Why not do that in a place where there are nice parks with clean air and nice scenery for your kids to run around, instead of worrying if your car outside has been carnapped or one of your family members has been attacked or mugged? These factors are now outweighing the benefits of large city living that may have been true in the past.
Unless city mayors and their councils decide to crack down on crime and install law and order, expect to see this migration of young talented people continue in the near and far future.