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Moving to an Area With a Higher Cost of Living

Moving to an Area With a Higher Cost of Living

How to Move to an Area with a High Cost of LivingWhen moving to a place with a higher cost of living (HCOL), earning power generally increases, and options for jobs might take a boost as well. These tips can help new homeowners make the transition.

1. Estimate Your New Purchasing Power

When living in an area with a lower cost of living, some might be surprised by how salaries differ in places like San Francisco or New York City. However, do not get lost in the digits. While a person's take-home pay may be a bit different after making the move to an area with a high cost of living, it's important to do research on what these numbers mean in this new area in a general sense.

2. Take Time to Understand the Local Market

Even home buying can be a bit different in areas with a higher cost of living. When looking at an area with explosive growth of home prices seemingly without check, you may realize there will be a market correction at some point. For example, the San Francisco Bay Area, arguably one of the most volatile real estate markets in the country, faces market correction about every 5-7 years. Before you start bidding, check into the history of the markets and neighborhoods being considered. Typically, buyers try to purchase in areas with the most stable rate of growth.

3. Look for Hidden Costs

HCOL areas have this name for a reason. They tend to be more expensive for most things. When thinking about your new budget, be sure to consider your mortgage, then add in higher expenses for:

  • Income taxes
  • Property taxes
  • Gasoline
  • Public transportation or parking
  • Food
  • Schooling
  • Entertainment

There will likely be an adjustment period moving to any city with a different cost of living, so be open to making adjustments here and there.

Buying a home when housing prices are at a premium takes courage and smarts. With these tips, you can ease into your new life and prepare to buy a home with more information and a solid plan.

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