S2E36 – How To Buy A House In An Unaffordable Housing Market

Are you a first time home buyer wondering how to become a homeowner with housing affordability at all time lows as house prices and mortgage interest rates head higher? What’s the solution for buying a house in this real estate market? Should you consider moving to a more affordable area? Should you sacrifice location to become a homeowner? In this episode, we discuss the idea of moving to more affordable housing market as we help you become The Educated HomeBuyer.

✅ – Want to get connected with us or to a local expert in your market, please reach out at http://www.theeducatedhomebuyer.com/expert

Connect with me 👇 Jeb Smith (huntington beach Realtor/orange county real estate) DRE 01407449 Coldwell Banker Realty ➡I N S T A G R A M ➳ https://www.instagram.com/jebsmith ➡Y O U T U B E ➳https://www.youtube.com/c/JebSmith

Connect with me 👇 Josh Lewis (Huntington Beach Certified Mortgage Expert) DRE 01209148 Buywise Mortgage M:714-916-5727 E: josh@buywisemortgage.com ➡I N S T A G R A M ➳ https://www.instagram.com/joshlewiscmc ➡Y O U T U B E ➳https://www.youtube.com/c/buywiseborrowsmart

📩 – info@theeducatedhomebuyer.com

See Show Notes, See Below 👇

[00:00:00]  Jeb Smith, Huntington Beach Realtor: Should you consider moving to a low cost area to become a homeowner? We often talk on the podcast about how important home ownership is and why it’s such a staple in creating generational wealth. So in today’s episode, we want to dive a little bit deeper into the idea of moving to an area maybe that’s less desirable, to some extent, to become a homeowner.

Is it worth it? What things you should consider? I think that’s a really good place to kick it off, Josh. 

[00:00:41] Josh Lewis, Certified Mortgage Consultant: Absolutely Jeb, this is a topic that comes up fairly regularly, on the live show. Few weeks back Kim, one of our regular listeners asked, Hey, has the housing market just passed me by? Am I never gonna be able to buy a house? 

I said, you could buy a house tomorrow. You make plenty of money to buy a home. You can’t buy a home here in Southern California where you live that meets your family size requirements. If she wanted to go buy a one bedroom condo, she could do that, but she can’t get something that meets the needs for her family.

And it was sort of an eye-opener for her. Not that she had never considered that or never thought of it, it’s just a different way of looking at it. We all have to prioritize things and for some very valid reasons that we’re gonna go through during the show here. Many people prioritize location over ownership. 

We talk about on the show all the reasons why home ownership is important. This is a personal decision. No one can tell you what is right. I believe it was on the Dave Ramsey episode a couple weeks ago on the YouTube post, someone had posted a comment and they said, husband and wife, husband’s I’m all for it. I want to get outta here. I wanna go to a lower cost of living area where I don’t have to work 60 hours a week and I can own a home. 

And the wife’s no, I wanna be here and you my friends, I want to have X, Y, and Z. And neither one of those answers is wrong. So today what we want to do is go through what you really should be looking at, what you should be considering.

And Jeb, if you’re like me, I have clients who’ve done this who’ve moved outta state. I shouldn’t say clients because if they owned here in California, they would’ve stayed, but I have a lot of people who have moved outta state. And many of them have been happy. We also know many who have rapidly retreated and come back here to California or wherever their home base was.

My neighbors just recently moved down to San Diego and rented their house. The people that are renting it from them, sold nine months ago, moved to Tennessee and bought a house. Already sold that house and came back. You and I both know lots of people moved to Tennessee and love it, say it’s the greatest thing they’ve ever done.

These people couldn’t get back here quick enough. So really just want to go through the details and make sure you’re analyzing your options and thoughts and thinking it all the way through before you make a decision one way or the other. 

[00:02:37] Jeb Smith, Huntington Beach Realtor: Absolutely. The grass is not always greener, right? There are definitely benefits to living outside of California. We live in Southern California. There are definitely benefits to living outside of California, for many different reasons. And we don’t have to get into ’em here on the show. 

But with that, You sacrifice some things by moving out of California, and that’s one of the reasons that my family and I have chosen to stay [00:03:00] here in Southern California is because for us, those pros, if you will, what we get to do here in Southern California. The weather. The ability to be in the mountains, be at the beach, do all of these different things, outweighs some of the other things that we’re not fans of. 

And so for whoever’s listening to this, you have to make the decision for you. Now, in some cases, You like everything about California, but for whatever reason, you just aren’t in a position to buy a home.

Housing affordability, you don’t have the down payment, rates. Maybe you don’t have the income, whatever it is. And so you love everything about here, but you want to become a homeowner and therefore you might have to consider moving out of the area. 

And Josh, my wife and I were doing a little camping this past weekend. And we were up in central California, just north of Central Valley in an area called Shaver, right?

Shaver Lake is up in that area. Beautiful area of California. Lake is amazing. Like a lot of really cool things about that area. But it’s a small town. And with that small town, very few restaurants, very few stores, housing isn’t what we’re used to here in Southern California. And so we were talking about some of the houses as we were going by it.

And she basically made the comment, if I had to live up here, I would just rent. I wouldn’t live here. I would rather live where we live right now and rent. And so I think that’s the decision for a lot of people. Is it more important for you to live where you wanna live and continue renting, or is it more important to move to a location that’s a little bit more affordable and become a homeowner and take that path.

So Josh, with those thoughts in mind, what are you thinking? 

[00:04:38] Josh Lewis, Certified Mortgage Consultant: Let’s look at it this way. The show is The Educated Homebuyer. We’re talking about housing. Housing is the thousand pound gorilla here that you cannot get around. When people talk about lower cost of living area, realistically, within a country, within the United States, what things vary by region?

First and foremost, number one is housing. Many parts of the country, we’ve gone through this in different episodes, you can buy a really nice 2000 square foot single family home for anywhere from 200,000 to $350,000. For us in Southern California, say Orange County, LA County. $650,000 is your absolute low end of that many communities started $850,000 or even a million dollars.

[00:05:20] Jeb Smith, Huntington Beach Realtor: So we’re talking single family homes here, guys. Not condo, little single homes. Yeah, we’re not. So you can get a little bit less expensive. Yeah. 

[00:05:26] Josh Lewis, Certified Mortgage Consultant: So that’s a massive difference, especially with rates as high as they are right now. We’re talking payment differences of three to $4,000 a month. So is that a lower cost of living? That’s a massively lower cost of living. 

The second piece that can and does vary by region is taxes, both income taxes and property taxes. So our property tax rates in California are high, but they’re capped. Once you get into the price over time, 15, 20 years from now, you go, Hey, my property taxes are not that bad.

So an area like Texas, Texas has no state income tax. So you can look and say, Hey, my wife and I make $120,000 and in California we get [00:06:00] taxed, the effective rate. 8%, 9%. So I’m getting a $700 a month raise by moving to Texas. 

If you’re wanting to become a homeowner, their property tax rates are double what they are here and they’re not capped. So they’re gonna go up every year that you own that home. So it’s important to, to know those things. 

 If we were to list everything here, what are things that go into the cost of living? Food, energy, transportation, healthcare, childcare. I highlighted here the only things that I see can vary by region: shelter varies a lot. Taxes vary less, but still a lot. Energy a little bit. 

Like for us here in California, that’s one that we don’t like because our gas, our electricity, our natural gas, everything is more expensive than anywhere else in the country because of a highly regulated market. For those of you who think government intervention is an awesome thing. Look at what we pay for the things relative to the other 49 states. 

Childcare. Possibly childcare is cheaper in other states where there’s a lower cost of living where your person that’s going to watch your children doesn’t need to make as much as they do in California. So to me, when we’re really looking at these things, energy is pretty minimal.

You would be able to speak much better to childcare, but really we’re talking about how much of my money do I get to keep in other states and how much can I allocate towards my housing before we can determine is there a significant enough difference in my cost of living to make it worth moving to another state to own a home.

[00:07:15] Jeb Smith, Huntington Beach Realtor: Well, when I hear you say that, Josh, what I think of is I’m from rural North Carolina, right? Out in the country, small town, and it’s considerably less expensive to buy a home. Gas is less expensive back in North Carolina. Just the cost all the way around. Food is less expensive, everything, right? My buddies and I go out and, have a drink or whatever, and I remember one time specifically leaving my card at the bar and telling everybody, Hey, just put it on my tab.

And at the end of the night I got my tab and I looked at it and I thought like something is wrong. It’s 60 bucks or something, when in California it probably would’ve been $300. It was so much less expensive just for that sort of thing. And so not that’s a reason to move to another area, but things are typically all the way around, less expensive in some of these areas. 

Now, a lot of people have moved to areas like Tennessee and Arizona and Texas and all of these big metropolitan cities where it’s less expensive to own a home, but restaurants and all of the main things, main staples are still considerably, pretty comparable to California prices in many ways.

And so you just gotta make sure if you’re considering that move. That you’re taking all of these things into account. It’s not, you can’t just say, real estate is less expensive, therefore I’m going to buy. That’s where people get themselves in a position where the tax bill comes and they go, holy cow. Like I had no idea that my property taxes were gonna continue to go up. 

And like you mentioned earlier, people moving outta state and coming back. I have a friend that went and bought in Austin before the market went crazy. Bought in a new construction community, bought the model home. Super nice property and was back in California within six months. And now he’s renting because he sold his house here.

He had his [00:09:00] property there for a period of time, but ended up selling it and he still hasn’t bought. And like we said, the grass isn’t always greener, so just make sure you’re considering these things. 

[00:09:07] Josh Lewis, Certified Mortgage Consultant: Kind of to underscore this, for those of you around the country in the other 49 states, probably get tired of us talking about California, but I thought this was a really good example to show why really this relocation to lower cost of living areas is really relocation to lower cost of housing areas.

The state of California doing some planning for the long term. Next 30, 35 years. They did a study, by 2060 LA County is expected to lose 10% of its residents. That’s 1.7 million residents. 

And at the same time, San Joaquin County, central Valley, where Jeb was here recently, famous for farming. Much lower cost of living is expected to go up 25%. 

Why? Are people in LA County going, you know what, I gotta get the heck outta here and go to Fresno or Visalia or Tulare? No, they’re not. But they’re saying, Hey, I cannot afford a $750,000 starter home, but I can go there and get a really sweet house for $400,000.

And then on top of that, Jeb, something that we need to consider. For those of you who, thinking of this, why would the Central Valley be desirable? Because it’s a three hour drive back here to Southern California. Some of the things we’re gonna talk about, the cultural things, food, restaurants, amusement parks, beaches, you can still come visit those.

It’s the same reason why for Southern Californians, both Vegas and Phoenix are very popular. You can get to a lower tax state, lower housing state, and still be close enough to get back to amenities and family. So I think really this discussion, I don’t think absent housing, anyone’s gonna say, I’m gonna move to one of those other areas.

There are people who would prefer a rural area, slower pace of life, but 95% of these people that are leaving high cost of living areas to lower cost of living areas are doing it for home ownership and lower cost of shelter one way or the other. 

[00:10:46] Jeb Smith, Huntington Beach Realtor: Yeah, but politics, right? Politics drives a lot of people outta California for one. I can say that personally, I have a lot of clients that have moved out. I probably get four to five a year that sell their homes in California and move out and they’re completely transparent. Politics is one of the big things. So some people let that get to them on a daily basis.

I choose not to let it. I can’t control it, therefore, I don’t worry about it so much. Doesn’t mean I don’t pay attention to it, I just don’t let it affect my day to day. So politics, LA quite frankly can be a shithole in many regards. If you live in LA I’m sorry, but the homelessness is absolutely insane.

My wife was just in San Diego, in fact with your wife, and she was saying how San Diego downtown has now become not what LA is, but not what it was two years ago. So that is going to push some people out. Absent the housing aspect people are gonna say, I don’t wanna be around this.

And so as long as that stuff’s happening, and a lot of that is happening due to the cost of housing, quite frankly. But, topic for another conversation, Josh. So we’ve talked about some of the negatives of moving out of the area and why home ownership’s important. Let’s talk about some of the upsides in moving out of area. Benefits that you get, things to consider if that’s the direction you’re thinking of going.[00:12:00] 

[00:12:01] Josh Lewis, Certified Mortgage Consultant: I don’t even know that we went all that deep on the drawbacks, so we can circle back to that. But in terms of going out of the area, a big thing people that are in dense urban areas don’t realize how crazy the 90% of the people in the other part of the country think we are. Just pace and speed and hustle and bustle.

Every time I go, you guys probably know I got family in North Idaho. We go up there a couple times a year and it’s just different. You talk about, hey, if I wanna see a concert, Every concert is coming to town. Taylor Swift will be in LA.

[00:12:33] Jeb Smith, Huntington Beach Realtor: Are you going? Are you a Swifty?

[00:12:35] Josh Lewis, Certified Mortgage Consultant: I missed it. But who again? And that’s big star. And she’s gonna hit all the big cities. But I have some artists that I like that are little. That they’re not going to little towns. They might be in a little town in the south or in the northeast, but they’re not gonna be little towns everywhere.

So we focus on culturally, you don’t have the ballet, you don’t have the symphony, you don’t have concerts, things of that sort. You don’t have the fine dining that you have in more urban areas. But what do you have? Like in North Idaho, everyone has a boat, everyone has a side-by-side. Everyone has an rv and weekends are not spent going to concerts and eating out at restaurants, they go out hunting, fishing, camping. 

So again, that may not be you. If you grew up in the city, you may go, that sounds awful. I don’t ever want to do that. But different priorities, different pace and speed of life. So in addition, To the lower cost you have just a slower pace of life. People know each other better and are friendlier.

Unfortunately last month I was up there for my stepdad’s funeral and everyone knew everyone. Like it seems like in Southern California, if you have an event like that, some people will know other people. But at that there was a hundred people, 80 people. And everyone knew everyone and Coeur d’Alene, Idaho. Hayden, Idaho is not a small area. It’s not a big area, it’s not a small area. 

So there are advantages and things that you would get that you don’t necessarily have here in southern California. In that area, there’s really two high schools. For us, Jeb, we’ve got five in our city. So your kids can grow up in a city and not know kids that live three miles from them.

So there are definitely some benefits from that end. What else were you thinking of? 

[00:14:19] Jeb Smith, Huntington Beach Realtor: Quality of life, right? You hit the nail on the head there. As somebody that’s from a rural area, I grew up having the ability to ride four-wheelers, quads, or whatever you wanna call ’em. Play in the woods, shoot guns, do all of the things that was normal for our area.

And now when my kids go back, I look at where we live now, right? Downtown Huntington Beach. Really close to the ocean, very fortunate in that regard. But we don’t have a big yard, right? We don’t have the ability to ride quads, shoot guns, do any of the things that I did as a kid. And that’s okay.

But when my kids now go back to where I was raised, they have a blast. And I look back on that and go, am [00:15:00] I depriving them by not having that sort of thing. And they want it, right? My middle son would move back there in a heartbeat. But, to each his own. It’s one of those things that it definitely has pros, definitely has cons. 

You’ve just gotta figure out what’s important. For me, the one thing keeping me in Southern California is the weather. A lot of places have four seasons. Where I’m from has four seasons. Now, it doesn’t get super cold, but it snows and it gets in the low twenties, teens during the winter. It rains, it’s humid, there’s bugs. 

There’s all of those things that quite frankly, don’t seem like a big deal. But when you don’t have ’em and your body’s not used to all of that, and then you go back, you’re like, what am I doing here? 

And I was fortunate enough to buy at a time when it was right in my life. We talk about that. Getting ready to have our first child and just in a stage in my career where I started making more money and all of these things. 

And now I’m in a position where, Hey, listen, even if I left California, there’s a really good chance that I hold onto that property, right? Just in case I decide to come back. 

[00:16:02] Josh Lewis, Certified Mortgage Consultant: Jeb, the one thing that we didn’t cover in terms of potential drawbacks, this could be, this could not be, but wanted to go through this… oftentimes when people consider this, and one of the reasons that got flipped on its head during the pandemic and remote working is income.

People say, Hey, great. So if I leave LA County where lots of good jobs, the Bay Area, lots of tech jobs, even though they’re having some layoffs and struggles, if I go to Vegas or Phoenix or the Central Valley, I’m gonna have to take a big pay cut. 

An interesting piece of information that I came across in doing some research for the show is there’s a company called Gravy and they actually analyze cell phone data and they can tell when people move based off of where their cell phone regularly pings.

And when they looked and they say the net exodus is from areas of higher cost to areas with median home price of $279,000. So that’s 38% lower than the areas that they’re leaving. So they’re leaving areas with median home prices, around half a million, a little higher than that, going to areas of $279,000.

The thing that they found, the median household income in the lower priced areas they’re going to is only 9% less. If you can get a 35% lower housing cost and you have only a 9% decrease in income, that’s pretty darn good. We have a lot of people now who don’t have to face any decrease in income.

This is shifting. Companies are trying to get employees back on site. But, I do probably a loan every month for someone leaving the area of their work. Whether they’re in California or moving outside of California, we get a letter from an employer that says, yes, this employee has been with us for seven years and they are free to work remotely or onsite, whichever they prefer. Or their job is completely remote. 

So that is the thing that you have to examine. I think Omaha Jeb was the area that we looked at and we found lots of nice houses that people that are buying in Southern California would be thrilled to have relative to what they’re buying for $700-900k for about $200,000.

We also looked at that, and if I remember correctly, median income for Omaha is about [00:18:00] 80% of what we have here in Southern California. So is it a cut? Yeah, it’s absolutely a cut. But most people will say, I’ll leave 20% of income on the table if I’m getting a 65% reduction in what my housing cost is ’cause for most budgets, most household budgets, we’re talking that is half of the household budget or more.

When you say, here’s my gross income, I get to keep 70, 75% of that, half of what’s left, 30, 35% is going to housing for most people in Southern California. Was looking at a chart yesterday from Black Knight of how much that’s gone up in the last couple of years as both home prices and interest rates have gone up.

The percentage of household income that goes to the housing payment for people who’ve owned their home for more than three years is really low. It’s 20%. When you get people that bought in the last two years, it’s like almost 40%. 

So these are things to take into account. You need to know your situation, both today, what is my income if I leave? Can I take my income? If I have to replace my job, what does my job look like and what does my income look like in the next area? And that’s today. We also have to look forward. I was reading an article, guy that works for the Wall Street Journal said he had moved to Columbus, Ohio.

One of the areas that’s very affordable and has a pretty darn good economy and a lot of people are moving to for affordability. And for him, he owned a home. Everything was great. They were saving money, maxing their 401k’s. He got an opportunity to move back to New York City and take a job promotion.

And he said, although I make 30% more, it feels like 80% less because everything is so much more expensive here. He said, we make combined less than $200,000 with the raise and to be equal to where I was in Columbus, Ohio, I would need to be at $400,000. 

And you say that’s insane. Why would he do that? He said, being here in New York near Prime assignments, 10 years from now, I should be making much more money. So it’s not as simple as just saying, what’s my pay here? What’s my pay there? And making the right decision for you. You have to know what your career trajectory looks like in the future, and if possibly you could take your job with you and if your industry is one where remote working is an option and you could possibly keep a higher rate of pay while going to a lower cost of living area.

[00:20:07] Jeb Smith, Huntington Beach Realtor: And I think that, something that, that you didn’t touch on there is that one reason why home prices did go up so much over the last couple of years in some of these areas that never saw appreciation over like a 20 year span, right? There are areas that appreciate annually five to 6%, consistently over a 50 year period like Southern California.

And then there are areas of the country that see very little appreciation over a 10, 15, 20 year period and then all of a sudden over the last two years, Saw it go up 20% or whatever the number is just gangbuster and it’s because of that remote working, right? 

People having the ability to keep their pay and move to more affordable areas, and maybe they’re moving for housing, maybe they’re moving because they want to go back to be with family, and now they can keep the pay that they had, in a high paying state like California or New York, or just quality of life, right?

People just getting out for one [00:21:00] reason or another. And because of that, we saw a shift in not only in migration patterns, just something we’ve never seen before. And you touched on a minute ago where, the gravy data shows the cell phones, pinging and where people are moving to and what have you.

If you go to the National Association of Realtors website they actually have a migration tracker on there and you can see where people are moving from and where people are moving to. And the last time I checked, it’s been about a year, but the most people were moving from California to Texas. But what’s crazy is that Texas was also returning the most people back to California.

So the most people that were moving from Texas were moving back to California. So it’s one of those weird things. And when you look at net migration after people moving out and moving back in, people always talk about California, all these people leaving house prices have to drop.

No, we also get people coming back into the state and there’s so many people in the state that want to become homeowners that will eventually buy a house and demographics and all of these different things that are gonna keep home prices stable. So for that reason, if you’re sitting in California waiting for everybody to leave so that house prices drop and you can become a homeowner.

I would say, don’t hold your breath, you’re gonna pass out. Make sure you’re looking at these things in other areas and determining what makes sense. We talk about, if you’re gonna move to an area that is a lower cost. 

The things that I would pay attention to, Josh are what’s happening with employment there? Are there jobs? Is there growth in the economy? Are people moving there for one reason or another? And when we talk about investing in outta state, it’s the same exact things, right? If we’re talking about should you buy an investment property in another area because maybe you own a home in California, but you’re considering investing outta state.

I would say the same exact principles apply as to what we’re talking about right now. Growth. Are there people moving there? Do they have jobs? Are you seeing businesses move there? Healthcare, hospitals, any sort of redevelopment that’s going to bring in more people because growth is what produces higher paying jobs, produces more building, produces home prices to remain stable and probably appreciate over a period of time.

And on the flip side, if you’re in an area that doesn’t have some of these things, then maybe you consider moving to an area that has a bit more of it because that’s really what’s going to help you build that I would say foundation for finding the right area to move to, especially if you’re looking at low cost.

[00:23:36] Josh Lewis, Certified Mortgage Consultant: Another way of looking at what you just said that may be helpful to some people is that systems, especially in a free open market economy, which housing in the United States is, are self-correcting. So we’ve had this, the crash guys are telling us we’re too high above the long-term trends, so it has to crash to come back down.

So it’s really a fancy way of talking about mean reversion. When we have it go the other way, when you have high cost areas [00:24:00] get so high. One of the ways that the system self-correct is people leave those areas and other areas will go up. 

So historically we’ve looked and said there are cyclical markets in the US which there’s a handful of them and most of them are linear, that they just plug along and they go up two, three, 4% over time.

And then we have areas like Southern California, like Boston, like New York City, like a few markets in Florida and the Bay Area, obviously, that are very cyclical. Boom bust, they shoot up and then they drop back down, shoot up, and then they drop back down. I think we’re likely to see many of these other cities as the populations grow, as we have more internet connection.

People realize travel is pretty easy. When you look for us on the West Coast, why do Californians go to a handful of markets? Because Boise, Vegas, phoenix and to some degree Texas are pretty darn close. You can get back to see friends and family. You have the internet, you have FaceTime, you have all of these things.

So I think this is a trend that we will see, that the more affordable areas that have good up and coming economies, that have other amenities, people will continue relocating there and homes will get more expensive there. While we are closer to a cap, you and I are on record a million different places that we don’t think we’re going to have a crash anywhere, but definitely not in California.

But what it does mean, we are near a ceiling. There’s not really a recipe for another 20, 30% appreciation in the near term absent rates coming way down and income’s ticking way up. Or giving it 5, 6, 7 years for both of those things to happen. 

But in the meantime, a 34 year old, a 35 year old that just got married, that just had their first kid, they don’t go, Hey, I’m gonna wait 5, 6, 7 years for this correction in Southern California.

They say, I need to have a home. I need to start living my life. Life goes on and will happen, and people will seek out lower cost of living areas. So the reality is, this is not for everyone. Some people will make this decision and hate it. 

The whole purpose of the episode today is if you’re considering it, I think it’s absolutely essential that you consider it, even if you decide no, but you need to think through all of these things and be honest with yourself and know yourself to say, am I fully in for it? Do I realize I’m gonna be giving up some things? I’m gonna be getting some things? And are we committed to making this change? 

And like we said, the commenter on YouTube, you need to make sure husband and wife are both on board. Please don’t ever make a decision where only one of you is in.

It just never works. 

[00:26:20] Jeb Smith, Huntington Beach Realtor: Agreed. And we wrote down a list of cities here from the American Enterprise Institute, Josh, where they basically went over best and worst metro areas to be a first time home buyer. And a lot of the areas that are on the worst list are the areas that appreciated the most.

San Jose, Los Angeles, San Diego, San Francisco, Las Vegas, Boise, Seattle, some others on there. Salt Lake City. I realized Salt Lake City went up, but not to the point where it makes it a 10 worst metro. Colorado Springs, Denver’s also on there. Most of these are West Coast, right?

I mean, There’s nothing on there past Utah or Colorado rather everything else. And then when they go to the 10 best metros. They got Pittsburgh up there being [00:27:00] number one Cleveland, Ohio. Not Columbus, but you mentioned Columbus earlier. But Columbus does make the list at number 10.

You got Omaha, we mentioned that earlier. Detroit. Oklahoma City, Cincinnati, St. Louis, Milwaukee, Chicago. And then as I mentioned earlier, Columbus. So a lot of these are Midwest, right? You got the West Coast being the worst, the Midwest kind of being the best, right? 

And that’s that landlocked area where quite frankly, home prices are less expensive. And that’s the reason that, it makes it better, if you will, as a first time home buyer.

[00:27:33] Josh Lewis, Certified Mortgage Consultant: Jeb. And where I’ll leave it is I say there’s a lot of generational angst. Everyone says, oh, easy Boomer. So it’s easy to make fun of boomers and say bad things. It’s easy to say bad things about millennials. 

The one thing, a trend that we’ve seen with the younger generations, both millennials and Gen Z coming behind them, they’re less materialistic. They want a return to more family, slower pace of life.

So maybe those groups will be the ones to relocate and take some of the stress off of the systems in these busier urban cities. Get a slower pace of life, be more family/friend oriented, less focused on working 50, 60 hours a week and getting ahead.

Where that was, what boomers and Gen X were about. Gen X rebelled against it a little bit, maybe laid the groundwork for millennials and Gen Z, but it’s definitely a trend. It’s changed. We hear it all the time. I have people talking about it. And it’s something absolutely worth considering, even if ultimately you decide not to leave a higher cost of living area.

[00:28:30] Jeb Smith, Huntington Beach Realtor: And what I will say is that this isn’t an easy decision guys. We make it sound maybe easier than it is. Or maybe in some ways we made it sound like it’s harder than it is. But making the decision to pick up and transition your life away from family and friends, away from everything to become a homeowner, it’s not an easy decision.

At least it wouldn’t be for me. For some people it might be just the right decision. Hey, this is so important to me that I wanna do it. So when we sit here and talk about this, it’s more of an education. It’s not that, Hey, listen, this is the only way that you’re going to create generational wealth.

We’ve talked in other episodes about, Hey, if you don’t wanna become a homeowner, that is completely fine. Here are the things that you need to do in order to come out essentially with the same return as somebody that owns a home. 

Just understand when you’re doing this, thinking it through, having a plan is super important. You know, Josh and I, I think one of the worst things that we hear from listeners, from viewers is people say that, I’ll just never be able to afford a home. I’ll just never be able to do this. The system is rigged. It’s just, it’s not for me, blah, blah, blah. 

Listen, anything is possible if you create a plan. And execute that plan. It might not happen tomorrow, might not happen three years, five years from now. And with that, it may take some moving outta areas to lower cost areas to make it happen. 

But just understand it can happen and don’t get caught up in the whole scarcity type mindset and that you can’t do [00:30:00] it. We believe that you can, that’s why we’re here educating you and helping empower you to become The Educated Homebuyer. With that said, Josh, I’m gonna throw it your way to end the episode here because I went on a little rant there. 

But home ownership is important. The decision’s not easy. But it’s worth it. 

[00:30:14] Josh Lewis, Certified Mortgage Consultant: Absolutely. And I’ll say this, home ownership is one leg of the stool of building wealth. So if you decide, no, I need to stay career-wise or for any other reason in a high cost of living area, and it means you’re not gonna be able to buy a home, go back and listen to episode 24 of the second season here.

We go through how to prepare. If you decide home ownership isn’t right for you or just isn’t possible for you, there are still things that you can be doing to set yourself up for a financial future, even if home ownership is not a possibility or a reality for you today. 

So again, our goal here with the show is to help you buy right, borrow smart, and build wealth. If it’s not the time to buy or borrow, you can still build wealth. If you determine that home ownership isn’t right for you today. 

So with that, we’re gonna flip the script today and I’m gonna sign off Jeb with your catchphrase of we will see you next week. Adios, 

[00:31:07] Jeb Smith, Huntington Beach Realtor: Amigos.

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