The pandemic motivated millions of people to move for a variety of reasons, particularly those involving financial matters. Many workers in urban areas opted for areas with a lower cost of living when their jobs suddenly switched from in-office to remote work, while others sought less densely-populated locales to avoid large Covid-19 outbreaks common to metro areas like New York City and the Bay Area.
While the pandemic seems to be nearing an end in the U.S., the dynamics of our personal and professional lives in this “new normal” have been permanently changed. Some employers have opted for allowing long-term remote or hybrid work options to give employees greater flexibility, given how many employees reportedly want to work from home post-pandemic. Other employers are demanding that employees return to the office, which has proven to be a contentious issue in many industries and leading to labor shortages in cases where employees resigned instead of returning.
The unprecedentedly competitive housing market hasn’t helped matters; many people planning on buying a home this year have had to postpone their plans as homes across the country sell like hotcakes, sometimes for as much as 20-40% over the asking price.
None of this is meant to suggest that moving is impossible, of course. Renting one’s primary residence can make financial sense in a variety of instances, and if you’re hoping to buy, the housing market isn’t likely to remain this hot indefinitely.
Sooner or later, the Federal Reserve will increase interest rates, the pace of home building will increase as supply shortages resolve, and the laws of supply and demand will arguably even out both the rental and home-buying markets.
Things to Consider Before Moving
If you’re considering a move away from a high cost-of-living area sometime in the near future, here are some things to keep in mind before taking the leap.
Reasons for Leaving
First things first: what are your primary motivations for wanting to leave? Many people are driven by financial reasons, but is that all? Other reasons for moving away from a high cost-of-living area may include:
- Better employment or business opportunities elsewhere
- Being closer to family and friends
- Seeking better weather for your lifestyle
- Desire to live in a less-populated community with less noise and light pollution
- Greater access to things you need for hobbies, such as classes/instructors, trails, rivers or lakes, mountains, etc.
If you’re primarily driven to move away for financial reasons, there are several costs you should compare before deciding whether a move is truly right for you. First, what are the average rent or mortgage payment prices in the areas you’re considering a move to? Not just the base rent, either – what about utility costs? And transportation-related expenses, such as gas and auto insurance? What about groceries (availability and costs)? Local sales taxes, property taxes, and state income taxes?
High cost-of-living areas are certainly expensive, but it’s not always a guarantee that your next home will be much cheaper. By comparing costs of everything you regularly spend money on – not just living expenses – you’ll have a much better idea of whether moving will save you enough money to justify the potential downsides of leaving your current home.
Quality of Life Trade-Offs
You’re probably not solely motivated to move for financial reasons; if you’re anticipating a quality of life upgrade after moving to a more affordable area, consider the flip side: is there anything you might be sacrificing by moving elsewhere? For instance, if you’re moving away from a highly walkable area (as several high cost-of-living cities tend to be), this likely means you’ll need to drive more frequently and for longer distances, which not only drives up your auto-related expenses but also adds more time you’ll be spending enroute.
Does your current home offer a lot of amenities nearby, such as a variety of restaurants and grocery stores, entertainment venues, nature areas, and the like? Lower cost-of-living areas tend to have comparatively fewer amenities, which could also impact your quality of life in ways you might not expect if you’re only focused on the financial advantages of leaving. The extent to which fewer amenities may impact you depends on your current lifestyle, but it’s nevertheless important to consider before finalizing your decision to minimize the risks of regretting it.
If you’re going to move away from family and/or a large social circle, do you have any social connections in the new place(s) you’re thinking about moving to? If not, how difficult is it for you to make new friends as an adult?
While there are plenty of opportunities for establishing new friendships through platforms like Meetup.com and other group-based activities, it can still be difficult to rebuild your social circle from the ground up when you move to a new community as an adult. Again, the extent to which this social dilemma impacts you will depend on your personality and lifestyle, but it’s yet another issue to factor into your moving plans beyond just the financial aspects.
Moving to a new city, state or even country is not a decision that should be taken lightly, nor should it focus only on the financial benefits of moving to a lower cost-of-living area. These are undoubtedly big advantages, of course, but with the quality of life and social trade-offs factored in, you may find that affordability isn’t your #1 concern after all. Assuming you’re not in a hurry to move for whatever reason, take time to really reflect on your options and strive to objectively weigh the pros and cons of each possible outcome before finalizing your decision to move or stay.