I (well, realistically my wife and I) just bought a house and I remember thinking "now would be a good time for a bout of inflation." I'm not quite as certain about that anymore but the rate we got is a fair bit less then 7% so I suppose we're making out on this to some degree. Not on groceries though.
It's not (just) about the interest rate on your mortgage, though. The real benefit comes as salaries ratchet up in response to inflation, which will happen as long as the inflation is somewhat persistent.
Thinking back to the mid-90s, for example, CS grads from prestigious schools were jockeying to earn $40k-$60k at prestigious tech firms. They were able to purchase houses on those salaries. If someone purchased a house in e.g. San Mateo after a couple of promotions to $75k, they might have spent in the neighborhood of $250k[1]. A few rounds of inflation later, the payments on that mortgage are inconsequential to that person (who may still, in 2022, hold a mortgage there).
Great thing that it's possible to work remotely from low-cost areas now! If the median home price in your area is more than $320k, you might consider going remote and buying elsewhere. (If home ownership is a top priority.)
Low-cost areas are almost all not places you want to live with a family, if you have a choice. They almost all have poor services for families and mediocre to bad public schools.
Unless you can afford to have one parent not work and that parent is good at teaching kids at many ages and in many subjects and that parent won't go insane doing that for years on end, which is at any rate opportunity-cost probably more expensive than just moving somewhere less cheap in the first place (especially if the other parent is that capable, surely their earning potential is significant).
So this works well for single people with remote jobs or couples who never want kids and for whom neither partner's work requires proximity to a decent city.
> Low-cost areas are almost all not places you want to live with a family, if you have a choice.
The unsaid foundation of this obvious bit of snobbery is that only a handful of coastal US cities are suitable for families.
The median house price in the US is $408k. If you live in a market with a higher median price (for example: Washington, D.C. is $600k, LA is over $900k, SF has a median of $1.3m), you like in one of the most expensive US markets. It's obviously silly to say that people living in e.g. Atlanta ($375k) or Charlotte ($355k) or Chicago (median: $324k) are all living in places with "poor services for families and mediocre to bad public schools." (Also: the median sale price in SF will buy you a mansion in most of those other cities.)
Everybody won't be able to buy both a home and the experience in living in one of the most expensive cities, but they should be aware that it's a choice.
> The unsaid foundation of this obvious bit of snobbery is that only a handful of coastal US cities are suitable for families.
Not obvious snobbery. Lower density means greater distance to and fewer options for child care and other important (or even just nice-to-have) services. Right? Possibly also greater distance to friends, relatives, et c., who could help out.
The rest is from many hours over several years trying and failing to find somewhere cheaper than my dead-center-middle-tier-city (mine's lamer than any of the cheap options you mentioned, except maybe Charlotte, but I wouldn't bet on it) 'burbs that has decent-or-better schools k-12. Conclusion: the choices are to compromise my kids' education, do home schooling, or pay for boarding school (which is not remotely something we could swing for more than, at a great stretch, maybe one kid—and there go all your savings on housing, and then some).
I do not live in a rich coastal city. My house is now over your $408 median but was way under that when we bought it three years ago (and we thought that price was a rip-off, already being way higher than it was about two years prior) and our schools are... good for the area.
In fact I've also struggled to find anywhere I could make a lateral move, price-wise, that would come with significantly better schools than where I am now. The trouble is that those areas are in-demand, so of course prices are higher than areas with worse schools.
What it sure looks like is there are floors on how low you can go in a given price bracket without school quality starting to slip. Realizing significant savings on housing by moving somewhere lamer and with worse local economic opportunities than where I am now, comes at the price of worse schools. To get better schools (short of paying for a good private school) I'd pretty much have to move somewhere more expensive (though, to be clear, not all more expensive places have better schools than my district).
[EDIT] More to the point, my personal situation is pretty OK, actually—less than ideal, but OK—but even in this not-exciting economically-middling city housing prices are rising much faster than young folks can save for them. The point is that young people are getting priced out, even here, they're getting priced out of options like what I've taken, fast. Our house is up something like 35% over 3 years, and we though the price we paid was a rip-off (~20% higher than 2 years before that).
> Lower density means greater distance to and fewer options for child care and other important (or even just nice-to-have) services. Right?
You are Density is (outside of the top 4-5) a weak proxy for home prices[1]. Chicago being one example, the Houston metro being more dense than Seattle metro for another. More importantly, you have to go to a pretty small town to start missing even nice-to-have services. I'm suggesting that there are top 25 major metros where housing is cheaper than the US median and where there are good schools.
> What it sure looks like is there are floors on how low you can go in a given price bracket without school quality starting to slip.
This holds within, but not across, markets, obviously. $450k in one market is an excellent school district, while in California it's not. If your budget is $450k, you will land in a better neighborhood with better schools in a cheaper city than in a more expensive city.
> decent-or-better schools k-12
Reminder that rating sites like great schools penalize districts in urban areas. Density typically includes apartments/affordable housing/transit, which frequently includes people struggling financially and/or people whose first language is not English. This shows up in test scores. Even if every family at a school excels academically except those of more modest means, rating sites will ding the school. Even though research shows such environments are often very good for children. So "school quality" ratings basically are "what percentage of families in this neighborhood have white-collar professionals," which is not really a great measure. TL;DR; it's difficult to evaluate school quality via the Internet.
> Possibly also greater distance to friends, relatives, et c., who could help out.
Honestly, this is the real killer. I empathize with folks with tight familial ties to California, for this reason.
> This holds within, but not across, markets, obviously. $450k in one market is an excellent school district, while in California it's not. If your budget is $450k, you will land in a better neighborhood with better schools in a cheaper city than in a more expensive city.
Yeah, you are right about that. Thing is, even the area I'm in is inflating much faster than incomes are. I don't think young people coming up are going to have an easy time getting into even the relatively-cheap-but-decent-schools places like where I am. They're rapidly becoming not-cheap.
> Reminder that rating sites like great schools penalize districts in urban areas. Density typically includes apartments/affordable housing/transit, which frequently includes people struggling financially and/or people whose first language is not English. This shows up in test scores. Even if every family at a school excels academically except those of more modest means, rating sites will ding the school. Even though research shows such environments are often very good for children. So "school quality" ratings basically are "what percentage of families in this neighborhood have white-collar professionals," which is not really a great measure. TL;DR; it's difficult to evaluate school quality via the Internet.
Very true. I've seen some try to address this by making "equity" (or similar) a significant part of whatever final score they have, so that under-performing schools that are at least not notably failing to serve their low-income students get a big bump in the ratings, and apparently-good ones that are doing poorly at bringing up lower SES student scores have that failing amplified. Modern testing also helps with this, with a stronger focus on growth versus absolute scores. In both cases those can also muddy the waters, though, if your concern is trying to find the absolute best instruction and overall experience in an area. Measurement of that is definitely a tough problem.
Separately, it is also the case that school quality appears to be largely based on selection bias, that is, the "good schools" also tend to have the easiest-to-teach (stable home lives, probably not having money problems) students—but it's also the case that better (more ambitious, better-performing, better-behaved) peer models and less classroom disruption will result in a better and more effective school experience, even if instruction quality were everywhere equal. It's a case in which my aims for best-serving my kids, and how I wish the world worked, are in some conflict.
> Honestly, this is the real killer. I empathize with folks with tight familial ties to California, for this reason.
Yeah, general "just move somewhere with a better economy" advice (usually aimed at folks already in cheap areas, not cases like what we've been discussing) usually neglect that the benefits of having nearby, on-good-terms family and friends can cost well into the five figures to replicate without them, for folks with kids especially. Loss of free child care, loss of "hey can you come help me move this?", loss of free skilled help for, say, auto or home repair, free rides places if your car breaks down, free transport service for the kids, et c. That's such a huge benefit, hard to abandon, especially for people with low incomes. (or, as you note, people stuck having to choose between an expensive area and a cheaper one where they won't have close ties to people)
I'd ask, because I've spent many hours over the last ~6-7 years trying to find a way to save on housing costs (and, ideally, get closer to any sort of natural environment that's inviting rather than dull and off-putting—I'd actually accept a lateral move, price wise, to gain that) without school quality suffering and without one of us having to home-school, but I doubt you want to publicize it :-)
I fear we're already at about the optimal cost/school-quality point. We're already in a boring-ass place way away from the coasts, but even here housing prices are inflating faster than younger folks can save the money to buy them. It's crazy. For them the only way to buy a house will be to move somewhere with really bad schools, which was what I meant in my original post—I've got an OK situation, but younger folks won't have even this option.
I alluded to this in my other post, but unconsciously what people mean when they talk about school quality is "how many of the families are at least as educated/rich as we are?" Kids with educated parents fare better in school, so if you have a lot of educated families in a place, magically the schools improve.
The corollary to this is that when educated people move somewhere, the schools get better. have seen this happen in a number of city neighborhoods in my area and others. And NYC is going through this now, as millionaires move to Brooklyn.
There definitely is a correlation between constituent family income and school "quality", sure, but the actual experience is still overall better (will tend to be, anyway—please take any of these generalities as statistical in nature, not absolute) if you can get into those better-due-to-selection-bias schools. A lot of the same things that make kids in poorer schools harder to teach also mean more classroom disruption and worse peer models, which do harm the experience and outcomes for kids in those schools, even if they are from a stable household without money trouble and the effort & expertise that goes into instruction is identical.
That selection bias thing is part of why it's so damn hard to crack the problem of evening out (while, ideally, improving the average of) school performance—but when I'm wearing my parent-hat and not my speculating-about-public-policy-I'd-like-to-see hat, it's hard to conclude other than that paying attention to which schools are "best" is still a good idea, even if the reasons are a bit bullshitty.
Genuine question: are they doing real COL adjustments, or window dressing? For example, the Bay Area can reasonably costs 2-3x+ relative to other major US cities. Are remote jobs really cutting total comp by 50%-60% for remote workers in the US?
Or are the differences more cosmetic, like 20%? I have seen this before and it is always a huge win for the employee.
As salaries ratchet up, it will become progressively easier for you to pay your mortgage. Inflation is not all negative!