If you are looking to become a homeowner, there’s a high chance a location is one of the most important factors you are thinking about. However, a price of living is something that has to be considered, as well.
Living in the metropolis was a dream come true for most US citizens in previous decades. However, in the latest years, due to overpopulation as well as increased fear of pandemics, more and more people opt to move to the suburbs. Sure, living in the city is fun and exciting, but homebuyers have started to prefer peace and safety over crowded city streets. Not to mention, living in the suburbs is way cheaper compared to the city… Or is it? The price of living in the city at a first glance is way higher than living in the suburbs. In this article, we will compare the two and conclude whether or not the difference is as big as people think. Of course, people spend money on different things and in different ways, but we’ll focus on the basics.
Rent or Houseowning Costs
One of the first things everyone will calculate when trying to find out the price of living in a certain neighborhood is the cost of a house, or how high the rent is. In the end, calculating monthly expenses is extremely important. If you plan to rent, you should know that in 2019, the average rent in the US city was $1,848 per month, while the median rent in the suburbs was $1,269. This is showing the difference already.
Similarly, value for price is a lot higher in the suburbs when it comes to purchasing a home. According to Realtor, a typical suburban home costs around $230,000, and in the city the price of the same house would be $431,000. The difference is enormous! The price of a square foot in the suburbs is around 40% cheaper compared to the price in the city. In return, you can conclude that the price of living in the suburbs is way lower than the city.
Keep in mind, though, that the value of the homes rises faster in the urban locations. This information is important for many homebuyers, who are aware that they’d probably have to sell their house at some point. On average, home value rises around 11.3% yearly, while suburban home values grow slower, at a modest pace of 6.7%. If you are planning on profiting from your home in the following years, then suburbs perhaps aren’t the best idea.
Believe it or not, property taxes tend to be higher for homeowners in the suburbs. This influences the monthly price of living by a bit, however the situation is a bit more complicated. If you count in all the taxes, and not only the utility bills – including state, local and income – the suburbs are cheaper, although not by a lot. In fact, the difference is so small (not bigger than 1%) that we can freely say it’s the same. This is a result we bet no one expected.
Cost of Transportation
Transportation is also something that is quite different in the suburbs and the city. Of course, the big impact on the calculation is your work location. If you work from home or in the local office, this difference isn’t as important. However, most people aren’t that lucky.
On average, people spend less money and less time commuting in the cities. This is because most offices are, on average, closer to your home compared to suburbs, where homes are more dispersed. If we calculate the cost of car ownership, including gas price and maintenance, we come to $9,282 yearly, or around $773 a month. A car is definitely more important in the suburbs than in the city, so this cost is usually on people who live outside of the downtown.
It is more expensive to own a car than to use a public transportation. An average Uber ride costs around $13.36. If you took up to 10 Uber rides per month, yearly you’d be spending only about $1,603.20. Even if you take five time more rides, it will still be a lot more affordable comparing to the car price – and Uber is probably the most expensive kind of ride you can get. Buses or trains, which can be a bit hard to find in the suburbs, cost way less. So, unless you live in the suburbs without a car and decide to take an Uber ride to work every morning, the price of living when you need to commute is a lot higher in the suburbs.
Health care is a cost that most of us don’t even think about, until you end up needing it. Although the prices of hospitals and other health care should be the same, these costs end up to be slightly higher in the suburbs, compared to the city. At the same time, suburban households spend around 32% more on prescription and over-the-counter drugs.
Of course, lifestyle is the biggest determining factor when it comes to comparing the price of living. In the city, you’re closer to all sorts of entertainment and you have a huge variety of fun places. This can add a bit expenses on the transportation, however, it appears that people from the suburbs tend to spend a tiny bit amount more on entertainment compared to their city counterparts. This is probably because city dwellers have more options to choose from, and they will go out more but on cheaper places.
Similar results came when researching the grocery prices. Even though suburbs give you more options of being independent and producing a portion of your food by yourself, some grocery prices are a bit higher in the suburbs. Once again, this is because the suburban stores don’t have much competition. If you have only one story nearby, you won’t have much choice but to buy everyday necessities at that particular place, despite the prices.
These two living costs will depend on your own preferences and spending habits. If you like to dine out every day, your price of living will be much higher than if you grow your own vegetables.
Which One Is Cheaper?
According to the article, you have to do a lot of calculating when you’re trying to determine the price of living and which option is more affordable for you. Even though you can find much cheaper homes and the taxes are lower, suburban living has its own expenses that shouldn’t be forgotten.
Of course, expenses aren’t the only determining factor when it comes to living location. Some people are ready to give it all for a big house with a vast outdoors or to live in a safer, crime-free neighborhood. You have to take everything into the account and to find a way of life that works the best for you and your household. Only then you’ll be able to make the right decision.