Monday, December 7, 2015
By Jed Williams
The Cost of Living in a Thriving Economy

There is no question that living in the DC Metro Area is more expensive than most other places in the United States. My parents couldn’t believe we purchased our modest townhome with no land for more than three times as much as what their large single family home with a couple acres is worth in rural Ohio. They also can’t believe that just a few years out of college my husband and I are making what they are as they near retirement.

There are pros and cons to living in this area. Certainly, houses are more expensive, there is less land to be had, and people choose to rent or buy small condos because it’s more on par with what they can afford. However, we have one of the best job markets in the country. There is a reason so many young people flock to this area after college. Government and government contracting work is understandably more prevalent here than anywhere else in the country. We have buildings that need to be built to accommodate the growing the population. It’s sort of a “What came first, the chicken or the egg?” type of scenario. The more people who move in, the more jobs that are created, but people move here because there are jobs. We also have some of the best schools in the country, free museums, and every opportunity available to us.

It’s pretty common knowledge that your money buys you less here than it could other places in United States, but living in other places in the US would mean that you’re likely making less than you would living here. There is definitely something to be said about having job security in this area. In the ‘20s and early 2000s when the stock market was at all-time lows, this area remained largely untouched. At a time when Detroit is fighting just to stay alive, cities all around the DC Metro Area have builders competing over land bids. So what exactly are the income and home price statistics in the area?

One of the most interesting set of statistics to look at is the DC Metro Area’s median income vs. the price of home sales from the US Census Bureau. Little has changed in the last few years in regards to the numbers and inflation, so comparing numbers from different exact years doesn’t make a huge difference. Compared to the average of all other US metro areas’ median household incomes, the DC area does quite well. On average, if you move to any other metro area your median household income will be $53,607. Here, it’s $88,233. Granted, the cost of living index is 118 vs. the national average of 100. However, there is still a strong difference between the two. Our cost of living might be 118% higher than the national average, but we make 164% more. As for housing, the average value of a home in the DC Metro Area, including condos, townhomes, and single family homes, is $367,600.  The average for all metro areas across the United States? $188,300. That’s a 195% difference. Compared to our incomes, that’s quite a difference.

There is no question that you can get more bang for your buck elsewhere. But the question is, will you have any bucks if you go anywhere else? Our poverty rate is lower than the rest of the United States: 8.4% here compared to 15.5% on average.

These statistics aren’t meant to scare you into living here versus anywhere else in the country. There are jobs to be had and homes to be bought everywhere. And yes, we pay more for the little we get, but we have the ability to pay. You need to weigh the pros and cons for your family and your situation. For many of us, this is what we feel is the best place for us for where we are in life. While your real estate agent won’t be an expert on all metro areas across the United States, they will know everything possible about our immediate area.

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Jed WilliamsJed Williams
Principle Broker and founder of Hagan Realty