[onlyrealcuzzo]

I think this really depends on your lifestyle.

I save > 60% of my post-tax income. I'm able to do this because, 1) luckily, I make a lot of money, and 2) I don't have any dependents or health problems.

If I moved to St. Louis, I'd save an extra ~$2k a month in taxes, which is basically the cut in salary.

I /only/ spend $40k a year outside of housing (I realize this is a lot). A lot of that /was/ on traveling to see friends and family, and about 10% of that is utilities, car payments, etc - things that don't really change. Let's say $20k of my spending is on local services like entertainment and restaurants and general shopping. Let's say that's 30% cheaper in St. Louis.

That's $6k in savings. Plus another ~$1-2k per month in rent. Absolute tops, that's $30k per year. For context (not to brag), this is not much much more than my annual raise.

Sure, if you have a giant house and several dependents, and spend ALL of your post-tax income - living in Saint Louis could offer you twice as much spending power.

For a lot of people, it doesn't. Most of their money goes toward investments, and I can't buy investments any cheaper from Saint Louis than I can anywhere else in the world.

Finally, if you own, even with the $12k limit on SALT, the fact that Mortgage Interest is deductible makes the difference in housing not as extreme as it might appear if you make a lot of money. Also, a lot of places with very high housing prices - unsurprisingly - have really low property taxes.

[baskire]

Don’t forget owning a house the “cost” is mortgage INTEREST, property tax, and insurance premiums for owning.

With interest rates at 3%, property tax fixed to track inflation for life thnx to prop 13, and California home insurance stupidly low (50$/month for 1+ million house). It’s not that bad.

I did the math and owning is cheaper than renting in just a few years.

[eru]

Even without mortgage interest, owning a house outright has an opportunity cost. Since you could use that capital elsewhere instead.

[DavidPeiffer]

>...and California home insurance stupidly low (50$/month for 1+ million house).

This is the first I've heard of stupidly cheap home insurance. I'm sitting here in Iowa paying about 8x by value. Why is it so cheap? I don't present earthquake or wildfire risk, and almost nobody has pools...which are all decent risk factors.

[onlyrealcuzzo]

Because California houses aren't worth any more than Iowa houses, and you don't really need to insure land very much. All the value is the land.

And the land mostly has high values because of low property taxes combined with Prop 13, artificially low interest rates, and the difference between capital gains and income taxes.

[baskire]

Earthquake damage isn’t covered.

And California has relatively dry mild weather.

And we are talking about a 1.5 million dollar house in Bay Area being 1000 sqr ft with insurance rebuild cost of 300k+.

Chance of needing a rebuild are very, very, low.