Quote:
Originally Posted by jtown,man
Great point. "Urban" Nashville will cost me more than actual urban Chicago. No way around that. However, buying a typical suburban home in the Nashville metro vs Chicago's probably isn't too different. And while you might pay slightly more for homes in Nashville, your RE taxes will be drastically lower and you have no income taxes.
I will note that buying a home that is more expensive will also sell for a higher price. A high property tax will never be made up in a sale. It simply is throwing money away. A more expensive home makes up for the added monthly cost by selling for more when you put it on the market, a homeowner with high property taxes isn't rewarded for their monthly contributions come selling time.
Anyways, the cost of housing (certainly "urban") may be more in Nashville. But there is no income tax, lower property taxes, lower gas taxes, car registration/taxes, and lower sales tax, all which add up to savings at the end of the day.
Example:
A family makes 100,000 and lives in a median-priced home for their respective city:
Nashville Home: 404,000
Chicago Home : 324,000
So roughly 80,000 dollars cheaper in Chicago.
According to Zillow, a mortgage with taxes (not insurance and I kept the standard downpayment settings etc.) would be:
324,000 Chicago home: 1,778 a month
404,000 Nashville home: 1,798
So you can buy 80,000 dollars more home for essentially the same price in Nashville vs. Chicago. But then we have income taxes:
Chicago family: 4,900
Nashville family: 0
I found a number of 13,500 for the average miles driven per car in the US. With that number in mind (average of 25 mpg):
A year of driving in Chicago would cost you 210 dollars in gas taxes
A year of driving in Nashville would cost you 145 dollars in gas taxes
So between a home, gas, and income, we end up with 4,500 more dollars for a family making 100,000 dollars, living in the median-priced home, and driving the US average.
Renewing your car tag is 29 dollars in Tennessee, its something like 150 in Illinois.
These things add up.
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The numbers you've list show the Chicago family spending about $860 a month more than the Nashville family, assuming they went ahead and sprung for the $400,000 house and paid more taxes.
That's not nothing! Two working adults would each need to earn about $5,160 more per year in Chicago to make up for it. If you cared about nothing else than dollars and cents, there would need to be more or better job opportunities in Chicago to justify living here versus Nashville.
...unless that family owned one car in Chicago and needed two in Nashville. That single metric flips the cost benefit in Chicago's favor. Cars are extremely expensive!
Personally, I like visiting Nashville. And I really like the Smokey Mountains as a place for recreation. But it would take a LOT more than a few thousand dollars a year for me to give Chicago's airport connectivity and abundance of cultural activity (completely ignoring career prospects.) And in Chicago I say "hi" to my mailman when I'm walking my dog around 5:00. I walk to buy coffee in the morning or a bottle of wine for dinner, as needed, and don't need to get into a 6000 pound machine to do it. I walk to my dentist. In the summer, kids fill the sidewalk to buy stuff at the corner store when school gets out.
Even if I would save some money in Nashville or Northwest Indiana, there's a tremendous cost to replacing a walkable lifestyle with one that largely consists of trips from parking lot to parking lot. I have a couple friends who moved to the Detroit burbs for specifically this kind of financial calculation and are looking to move back to Chicago. They thought they would save some money, but both have ended up earning substantially less in Detroit than they expected and they hate that their life has been reduced to endless trips to Walmart or Target.