E. Tenn. is cheapest in living costs for wealthy
“East Tennessee is a fabulous value.”
– JOHN THORNTON, PRESIDENT OF THE CHATTANOOGA-BASED THUNDER ENTERPRISES
If you want more bang for your buck, it doesn’t get more affordable than East Tennessee, especially if you have a six-figure household income.
Half of the top 10 cheapest cities in America to live in are in Tennessee, including metropolitan Chattanooga and Cleveland, Tenn., according to a new study by the personal finance website Magnify Money. For a family of three with a household income of $100,000, the most affordable metro city to live in is Johnson City, Tenn., and the most expensive city is Washington, D.C.
“Where you live does make a real difference in the cost of living, not only with different tax rates and costs of food and housing but also with how much time and money you must spend on transportation or what child care may cost,” said MagnifyMoney’s Executive Editor Mandi Woodruff who authored the study. “You can live in rural Alabama and spend a lot of time and money on transportation or you can live in a big city and spend much more of your income on driving and parking.”
Woodruff said her study was an outgrowth of an earlier report in which she talked with many persons earning $100,000 or more who felt broke and struggled to pay their bills.
Woodruff said her study looked at a hypothetical couple with a 3-year-old child needing child care and earning a family income of $100,000. She found that Tennessee benefits by having no state income tax, cheaper housing, relatively easy transportation around town and lower priced energy, child care and local services.
“East Tennessee is a fabulous value,” said John Thornton, president of the Chattanooga-based Thunder Enterprises who has developed real estate projects from Hawaii to Tennessee. “People can build a great home on an acre of land in Jasper Highlands (Thornton’s residential development near Kimball, Tenn.) with great views for $300,000 and pay only $300 a year in homeowners dues and taxes that
are only a fraction of what people who are coming here have paid living elsewhere. Many of those moving here from Wisconsin, Chicago, Indiana or Florida come here and they can’t believe how much cheaper it is.”
Magnify Money compared all 381 metropolitan cities in the United States to see where a family earning $100,000 has the most wiggle room in their budgets.
In most East Tennessee cities, a $100,000 income leaves nearly a third of the take-home pay available for purchases beyond the necessities of housing, taxes, food, child care, utilities and transportation. But in Washington, D.C., and neighboring cities Arlington and Alexandria, Va., a household income of $100,000 a year would still leave the typical family of three $315 a month short of meeting all of the essential costs of living.
California had the most metro areas that were budget killers. The Golden State is home to nine out of the top 20 worst metros for six-figure families, including San Francisco, San Jose, Santa Cruz, San Diego and Napa.
“Compared to most anywhere, Chattanooga is a great place to live if you have a six-figure income,” said Jay Robinson, a Chattanooga Realtor who is one of the top selling real estate agents in the area for luxury and high-end homes. “We have no income tax and lower property taxes than many cities, and we remain a very affordable cost area for housing, even after home prices have increased rather dramatically in the past few years. The affordability of Chattanooga is extraordinary compared with most of the country.”
The median price of homes sold last month in Chattanooga was up 6.6 percent from a year ago to $177,000. While the local gain in home prices was nearly triple the rise in average wages, Chattanooga home prices in May were still 30 percent below the U.S. median of $252,800, according to the National Association of Realtors.