http://money.cnn.com/2005/12/05/real_es ... tm?cnn=yes



NEW YORK(CNNMoney.com) - Many residents of high-priced housing markets around the country are cashing out and moving to more affordable areas.

In Massachusetts, a quarter of the people in the state said they would leave if they had the opportunity, according to a poll by MassINC, a non-profit public policy think tank. They would join some 170,000 Bay Staters who left for other parts of the United States between 2000 and 2004.

The No. 1 reason cited by those who want to leave: The high cost of living. And the No. 1 area needing major improvement: Housing affordability.

On the other side of America, Hawaii faces a similar mindset -- two out of every five residents say they have considered leaving the islands because of the cost of housing, according to a poll co-sponsored by the Hawaii Business Roundtable and Pacific Resource Partnership.

There are other places that have been affected.

California suffers a net loss of about 100,000 residents a year to other states, according to Economy.com. In recent years, many have cashed out their rapidly appreciated homes and moved to Arizona, Washington, and Oregon.

But now that prices have climbed in those states as well, the latest trend is that Californians are turning to the Midwest, where spacious houses are available for half of the cost of similar space in Los Angeles.

"It makes increasing sense if you can buy more house and still live in a good area," says Conrad Egan, president and CEO of the Center for Housing Policy, a non-profit group that seeks to make sense of the nation's housing policy.

Compelling math
On Long Island, the once bucolic suburb but now heavily developed region next to New York City, about 70 percent of residents are at least somewhat concerned that high housing costs will drive their families from the region.

And this is not a far-off issue -- 45 percent said it was at least somewhat likely that they would move out during the next five years.

There are two factors at work, according to Carrie Meek Gallagher, project director of the Long Island Index, which published the findings.

The first is that younger Long Islanders aged 18 to 34 are unable to afford decent homes.

"Many families spend more than half their income on housing," says Egan at the Center for Housing Policy.

The second is that older residents who already own increasingly valuable property find they can sell their present homes, buy in less expensive locales, and have big nest eggs left over.

For them, the numbers add up like this: A Long Island couple with income of $100,000 wants to move to Daytona Beach. Florida as well as Georgia and the Carolinas are prime destinations for Long Islanders.

According to CNNMoney.com's cost of living calculator, they would need only about $68,000 a year there to live as they're accustomed to. (Try different scenarios with the tool calculator above.)

And selling their house and buying a new one down South would produce a big fat dividend. The American Homebuilders Association reports that a comparable home in the Deltona-Daytona Beach area, for example, costs about $194,000 compared with $434,000 in Long Island's Nassau County.

Younger Long Islanders, says Gallagher, often find that they may have to take a slight pay cut when they move to the Sun Belt, "but they more than make up for it by being able to buy a brand new house for half the price it would cost on Long Island."

The trend has already taken root and seems to be accelerating.

"There was a big jump, from 62 percent to 70 percent, in one year of the 18-to-34 age group who think they are likely to leave within the next five years," according to Gallagher.

Eroding affordability
On the other coast, an exodus of Californians leaving for Nevada has helped transform the housing market in Las Vegas into one of the hottest in the country.

But there are signs that Vegas is about played out. The median house there has leaped to $283,000 and the ratio to median income is now about 4.8, nearly as high as Long Island's ratio of about five to one.

The jump in Vegas has caused many Californians to think elsewhere.

For example, California money pouring into Arizona has helped make Phoenix the hottest house market in the country, with home values ballooning 55 percent over the last 12 months, according to the latest statistics from Office of Federal Housing Enterprise Oversight, which regulates Fannie Mae and Freddie Mac.

It's even been reported that Las Vegans are starting to pull up stakes for the cheaper markets such as Phoenix, Tucson, and Chandler, all in Arizona.

Now, what odds could you have gotten betting on that a few years ago?

As soon as I finish my degree, we are moving out of the Seattle area. Housing prices are out-fucking-rageous. You cannot find a home in King County for less than $200,000 and you cannot find one that's not falling apart in the entire 3 county metro area for that price either. Ridiculous, and we're nowhere near as bad as CA.

Try my house. I bought it in NJ, 3-bed, 2-bath for $310,000. A year later it was appraised for $400,000. And that was like 2 years ago. Though the market has cooled a bit, a comparable house down the street just sold for like $450,000. All I know is my house is an investment and when I think it's worth enough, I'm cashing out and moving anywhere else and I know I will get more for less.

Sweet isn't it? I live in NJ too. We bought our house a year ago and it recently appraised for $80K more than we paid.

Here, housing prices have doubled in the last two or three years. The house across the street from me was worth $270,000 just three years ago, and it recently sold for almost $500,000. Now the current owner wants over $600,000. Ours would probably sell for almost $500,000, and it was $200,000 four years ago when it was built.

3 BR, 1.75 Bath.
1760 Square feet.

Nice neighboorhood, but certainly not the best in town. Just a nice, middle class neighboorhood.

$539,000

I purchased a repo in january and paid 95,000.

In two years my house went from $250k to $410k.

I just don't understand where all these people are getting all this money. Are everyone's wealthy parents all dying at once? Surely people are buying a primary residence purely on speculation.

2 factors:

1. Interest rates dropped to 20 year lows which allowed people to borrow more money for the same monthly payment. And...

2. Banks made so much money by refinancing everyone under the sun, they have dropped their lending standards (meaning that some people that have received loans wouldn't have qualified for these same loans 5 years ago). Anyway, the later of the two means trouble in a few years as interest rates rise and these people can't make payments.

It looks like the Fed is going to raise interest rates another .5 to.75 basis points and then take a break. As longs as interest rates don't go up dramatically next year, there will not be any housing bust.

my place is now worth 70 grand more than what i paid for it.

Where at? My wife and I are probably going to purchase a house or townhome in Murfreesboro next summer. We've been looking around and see some great growth in Murfreesboro and we'll be there at least 5-6 years, long enough for an investment in a house or townhouse.

I don't know what my house is worth, but similar houses in the neighborhood have been going for 10-15% more than I paid 3 years ago.

the amounts of money mentioned in this thread could save all the starving kinds in my country!!

Portland is in the top 5 cheapest category?

I never would have guessed that in a million years.

teh SOUTH

I'm sure that's not the top 5 cheapest, just places where people are actually moving to. Here in Pittsburgh, I'm considering buying. You could buy a freaking palace in some of the nicest neighbourhoods for $400,000 or less, easily. I'm looking for a 3 BR place in a decent neighbourhood in good condition for about $150K. I shouldn't have too much trouble finding it.

King County prices are up 18% in the past 6 months.

Yeah. Maybe I could go into real estate and we could be like the Maloofs or something?

Looks like Sydney is pretty much only comparable to LA.

it's pretty tough to buy a house here on Long island. I need to go on a sick gambling run if i ever want to come close. I love this place so i don't want to leave but if i ever want to buy a home i'm gonna have to move.