Moving argument: Migration, cost of living studies encourage moves south

In 2008, United Van Lines, one of the nation's largest shippers of household goods, relocated nearly 200,000 customers. Most of them went south and west, many with golf clubs in tow.
United Van Lines has conducted a migration study for 37 years, and with such a large database of moves, the patterns among its customers reflect

The highest inbound states included the Carolinas and Alabama.

patterns in the larger population. The results of the company's study, which is published early each year, indicate that North and South Carolina and Alabama are among the "highest inbound" states in the nation ("highest inbound" defined as more than 55% of relocations into the state). Oregon, Nevada, Wyoming and South Dakota joined them as highest inbound states.
On the other side of the coin, the "highest outbound" states among United Van Lines' customers were mostly across the northeast quadrant of the nation, and included Maine, Rhode Island, New York, New Jersey, Pennsylvania, Michigan, Indiana, Illinois and North Dakota. A "highest outbound" designation reflects 55% of moves leaving a state. All other states are considered "balanced" by the study; that is, moves into or out of the state make up no more than 55% of total. (Note: The highest inbound "state" was the District of Columbia -- the study looks at the continental 48 states and the nation's capital district -- with a 62.1% rate. I will leave to others any political comments about increases in the size of government, or Republicans following Dick Cheney's lead and sticking around Washington).
Of course, there are many reasons people move, but generally it is safe to say they do so for what they perceive as a better life. People in their

Real estate prices are simply explained; it is all about supply and demand.

working years relocate for a better job, or a place they consider better to raise a family, or to be near aging parents. Those approaching their golden years leave for a warmer climate, a more relaxed atmosphere away from traffic, the threat of crime and the hassles of everyday life. Costs of living, naturally, are inherent in a better life, and looking at a chart of comparisons of expenses in 100 cities both north and south, it is easy to see why the migration patterns are toward the Carolinas, Alabama and some "balanced" states in the southern U.S.

A serious golfer moving from, say, Long Island, NY to Roanoke, VA, could join the new Ballyhack Golf Club, and help pay for it, in part, by saving 38% on their costs of living.

    Those leaving Boston, for example, according to a chart by ACCRA (American Chamber of Commerce Research Association) and published in Where to Retire magazine, will decrease their costs of living by moving to 64 cities across the nation, and increase their costs by moving to only two -- Honolulu (by 22%) and San Diego (by a mere 1%). A move from Boston to Savannah, for example, will drop costs by 30%, according to the ACCRA data, which measures costs of food, clothing, real estate, healthcare, transportation, utilities and a range of goods and services. Other COL improvements moving from Boston: Asheville, NC (25%); Austin, TX (28%); Charleston, SC (28%); Charlottesville, VA (19%); Greenville, SC (31%); Hilton Head Island (17%); Knoxville, TN (34%); Mobile, AL (30%); Myrtle Beach, SC (31%); Raleigh, NC (23%); Phoenix, AZ (25%); Wilmington, NC (24%). Note that the data does not include taxes, information which is easily available on the Internet. Suffice to say, however, that these cost of living "raises" moving from Boston to the south are significant.
   Those moving from New York City, New York's Nassau County, Washington, D.C., and some cities in California where home prices appreciated wildly in the 1990s and early 2000s will enjoy larger cost of living decreases than Bostonites who relocate south. Those leaving Chicago, Philadelphia, St. Paul, MN and other northern cities will find slightly smaller decreases than those from Boston but the improvements are still double-digit percentages.
   So what does this all mean? It means a lot for those who are flexible and have considered relocation to a warmer climate. First, if migration patterns

Migration patterns will continue north to south, which means properties will appreciate faster in the Carolinas than they will in the northeast and other northern areas.

continue north to south (and west) -- and the betting here is that, with more baby boomers nearing and reaching retirement age, they will -- then properties will appreciate faster in "highest inbound" states than they will in "highest outbound" states. Real estate price trends are really quite simply explained; it is all about supply and demand. High supply and low demand equal lower prices; high demand and low supply equal higher prices. In the current economy, the supply of homes everywhere is high, but when the markets stabilize, prices will appreciate faster in states like North and South Carolina than they will in New York, New Jersey and Illinois because of higher demand in the south.
Second, the ACCRA data argues that for those who live in the high-priced states up north, a move south will put more money in their pockets. A 30% improvement in cost of living means more house for your money and the

Holding out for the last dollar in your home for sale could cost you dearly in a number of ways.

opportunity to go out to dinner and enjoy more the fruits of your labor or your pension. And the data provide compelling evidence, as I have argued here before, that those with a plan to move to warmer climates should not hold out for the last dollar when they attempt to sell their homes. Doing so could cost you dearly in a number of ways -- by extending the length of time it takes to sell your house (and move on with your life); by forcing you to drop the price of your home later if your neighbors are pricing their homes more realistically; and by denying you months, and maybe years, of a lower cost of living and a less stressful lifestyle. And while the home you refuse to price at its true market value is not appreciating in market value, the home you would buy in the south is indeed appreciating, making it harder for you to afford later.
I know; I am a broken record, repeating what I have written here before; and because I make my living from helping people find their dream home on the course, it seems I have a vested interest in getting people to sell and buy. Okay, fine, don't believe me; just check the numbers. You can find the United Van Lines data by clicking here. Unfortunately, Where to Retire does not offer the ACCRA chart at its web site, although they offer a "free" sample issue there. Otherwise, you will have to plunk down $4.95 at Barnes and Noble or some other store with a large magazine stand. Or, better yet, contact me if you want to compare a city near you with a city you might be considering. I will be happy to share the data and my advice, which is always objective and always free.

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Sunday, 28 June 2009 05:03

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