What’s Distance Worth?

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What’s Distance Worth?

As circumstances in my life are leading me in the direction of staying put for a while, I’m beginning to think we need to purchase a house sooner than later. Yet, the budding question is where? Ideally, it would be within bicycling distance of where I’ll be spending most of my time which would put us within a radius of 5 miles. I’d like to think we can find something we like in a decent neighborhood at a decent price (decent price to me is a max of $370,000). But the more I search the online real estate sites, the more I think that might not happen. Why? You don’t get a whole hell of a lot for the money.

Case in point: Staying with a radius of 2-miles from where I currently live, most “decent” houses (1,500 sq. ft that don’t require too much work) are pushing $425,000. That’s a bit steep for us. If I look a little farther away (say 8 miles), the neighborhoods become a bit shady and the prices don’t decrease all that much.

However, if I look 15 – 20 miles north (or even west for that matter), I can get a much better house (newer with fewer things we’d have to repair, though not necessarily larger) for low $300,000′s. This is exactly why Los Angeles has become a sprawling metropolis that is completely car-dependent; affordable homes in decent neighborhoods are in the boonies.

So what is distance worth? Is it worth moving 15-20 miles away to become car dependent, spend an hour or more commuting for the nicer, less expensive house? Or do I settle for a fixer-upper in a shabbier, older neighborhood but ride my bike more often?

I’m sure if I did a complete cost analysis, I’d about break even. Moving farther away would mean we’d have to become a 2-car household and once I added in my time in the car, we’d break even on the costs when I compare the less expensive house to increasing our house budget by $55,000.

Mentally, I like the idea of living in a nicer neighborhood and in a nice home or one that I don’t have to completely overhaul. Ideally, if we could find a smaller home that needs less work on a larger lot, we could always add on to it later or install an outdoor office/guest room through the use of a shed/cabin.

The more I search, the more I have to ponder my options.

Did you have to make a tough choice on location based on  price?

9 Comments

Join the conversation and post a comment.

  1. krantcents

    I think there are always limitations when buying a home. There are trade offs and you determine value. When I bought my current home, I was traveling over an hour to work and then things changed. When I started teaching I traveled 20 minutes, then less miles, but same amount of time and finally I am down to 10 minutes. I learned that nothing is permanent ! This won’t be you last house or your last assignment.

  2. Michelle

    This is something that we are trying to decide! If we move further out, we would save more money. However, moving further out means that we would be closer to both of our works, it just means that we would be father from friends and family.

  3. Amanda L Grossman

    What part of the country are you looking in? I am from the Northeast, and home prices there are just as much as you’ve described. Fortunately, I live in Houston. We are not biking distance to downtown, but pretty near, and prices here for large homes are between $140,000-$200,000. Very affordable! I can bike to a few stores, a library, a YMCA/workout places, and our HOA has a pool just a block down the road.

    I hope you figure out which way you’d like to go.

    • Little House

      @Amanda – I live on the west coast (LA area) so it’s a little harder finding places that are under $200K or $300K for that matter. I’d love to move to a more affordable area, but Mr. LH is set on staying in sunny CA AND now things have shaped up to look like we’re staying put for a few more years here. I just have to find a place that’s somewhat affordable comparatively and make do.

  4. Squirrelers

    There are always tradeoffs, but I think one not to compromise is safety. No need to live in a shady area if that means higher crime rates.

    For me, a big motivator has been shorter commutes. Having had brutal commutes in the past, I have to say that it can be a big drain on time. But again, that’s better than a shady area. If the tradeoff is nicer home and longer commute, vs modest home and short commute, I’d go for the modest home – assuming price and safety are equal in both cases.

    • Little House

      @Squirrelers – Safety is definitely important. Mr. LH and I have already decided that we have to choose an area that’s decent, if not for safety, resell value. We’re staying focused on the “nicer” areas and trying to find something affordable. We are still about 12 months away from getting serious about looking, but I’m keeping my eye open.

  5. Pamela | Hands on Home Buyer

    Perception of a neighborhood’s safety is tough. Everyone has different tolerances.

    But I would suggest you spend some time walking or biking around some of the neighborhoods you find “shady” to see if they’re really unsafe. And talk to the people living there now.

    I lived in a distressed Philadelphia neighborhood for over a decade. But my neighborhood association worked together to bring the neighborhood back. We saw huge improvements and it was one of the most satisfying times of my life.

    A “shady” neighborhood where neighbors look out for each other can be a more satisfying place to live than a community that looks pristine but no one knows each other.

    I wrote about the tradeoffs last year. You might find some food for thought here: http://www.handsonhomebuyer.com/blog/2012/02/14/great-house-or-short-commute/

    • Little House

      @Pamela – You definitely have a point. If the neighbors band together and keep a look out for each other’s place, it can definitely reduce the “unsafe” feeling in a shady neighborhood. And I think I would take great neighbors over a “great” neighborhood where you don’t know your neighbors.

  6. Rob

    This post from the ever popular MMM might help, at least as far as the numbers go

    http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/

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