Steve’s note: This is an older post I decided to drag out, simply because it’s quite amazing for me to read my mindset, about a year before we pulled up stakes and left New York City for a small town in the South… and perhaps it’s a good case lesson in why you shouldn’t be so sure about what you think you’re sure about…
Remember, this is all written late 2007 – the real estate bubble has popped but the financial crisis is yet to come.
This past weekend I took the Brip Blap crew (myself, Bubelah, Little Buddy and almost-out-and-about baby #2) on a drive over to Queens to a birthday party for the daughter of Bubelah’s friend. This couple recently purchased a nice house in a nice neighborhood with nice schools and near to the epicenter of their ethnic community. The house was a fixer-upper when they bought it, so they had to put in some substantial money to fixing it up. They have not yet finished doing so, and the total cost, to date, is over $1 million. Although that is in the almost-worthless-US-dollar, it is still a substantial amount of moolah.
Switch to a couple of days before that. Out of curiosity, I looked on Ye Olde Internet for real estate in a small town in Pennsylvania outside of Philadelphia that Bubelah and I have visited and really like. A house, finished in grand style similar to our friends’ house but far bigger with a substantially larger yard was listed for about $500,000. Bigger house, bigger yard, all finished (no fixing up really necessary) for half as much – and probably half the property taxes, too.
Switch to years earlier and swoop down South to the ancestral estates of the Brip Blap family, sprawling across 3 acres of land in the Deep South. My parents have vacated their home in the South to move closer to my brother’s family (and closer to mine, as well). Their Deep South house – which I am sure they will not mind me referring to as “stylistically dated” (but a very nice home) – is a little smaller than the Pennsylvania and Queens houses, but on a huge lot with practically no property taxes. It might sell for about 15% of the cost of the Queens house.
So where do you draw the line? I know I could move to Kansas (no offense, Kansanians, I pick on Kansas because of the free land being offered there) and build Neverland II for what a decent-sized single family house would cost in Queens OR a 650-sq foot studio in Manhattan. Bubelah and I have often toyed with the idea of moving to Florida, a place we both like a lot, as well, and I am sure real estate on the beach is a lot more affordable today than it was two years ago. I used to joke about moving to Portugal, but I suspect with the dollar’s value where it is that wouldn’t be much of a bargain.
I think it says something about your core values if you choose to spend big on a place to live. I know there is a point at which we all draw the line, because I don’t see huge numbers of bloggers from the Soft Coasts moving to the heartland, nor vice-versa. Our friends in Queens spent big because they feel THAT IS IT. The home is in the midst of their community, near family, good neighborhood, schools, etc. etc. They have planted their flag, and staked their financial future to it; they will not have financial freedom in the next 10 years (or 30). But they are happy with that decision.
My point? I know financial freedom is not my #1 goal when I analyze it in this context. Bubelah and I could move to my parents’ home in the South and neither of us would need to work at a day job, starting tomorrow. With our various side-income producing ventures, given a little growth, we could probably support most of our needs. The schools are fine (I’m a product of them, and I think I can do sums and read a comic strip as well as the next person). But we won’t do it: family, climate, etc. enter into it but the kicker is really that neither of us can imagine living in a small town anymore. But this does mean, then, that our number one value is not financial freedom, as I often like to say it is. Our number one value may be family, or a more liberal big-city atmosphere, or the ability to eat Turkish cuisine frequently (best.food.ever) – but whatever our #1 value is, it is not financial freedom. So for now, no green acres!
But then… farewell new jersey…