To cut costs, move to small-town USA

By Liz Pulliam Weston

Real estate prices are stalling or even declining in some high-cost cities, but buying a home in a decent neighborhood is still just a dream for many middle-class families.

You can try stretching your finances to the bursting point or gambling on a less-desirable neighborhood. Or you can consider doing what many families have done: decamp to somewhere the cost of living makes more sense.

After all, where you live is probably the single biggest factor on your finances. A box of cereal costs pretty much the same everywhere, but a median-priced home ranges from under $100,000 in places such as upstate New York to well over $700,000 in parts of California.

A house payment one-seventh the size is tantalizing. There's a lot more to the decision than that, of course. The families you're about to meet fled the big city for very different reasons.

Making Idaho home

Home prices in Portland, Ore., aren't as outrageous as in some other West Coast cities, but the $270,000 median would have been a stretch for Darrin, a 41-year-old prison guard, his stay-at-home wife, Jennifer, 33, and their four children, ages 4 to 10. Darrin had the choice of transferring to another correctional facility, so after some research, the family chose to move to a small town in Idaho. He commutes across the state line to Oregon, a journey that takes less than an hour.

The home they bought for $169,900 is relatively small -- 1,400 square feet -- but would have cost twice as much in Portland, Jennifer said. Overall, she said, the move to a cheaper area was like getting a 12% pay raise.

"The costs of utilities, medical and transportation are less," Jennifer said. "The move allowed us to buy a home and allows me to continue to stay home and raise our children. The added benefit is that there is hardly any rain, (there are) definite seasons and the area is very family oriented."

The big downside: They're a 10- to 12-hour drive away from their families. They would love to be closer, Jennifer said, but the benefits of their country life far outweigh that disadvantage. "We're staying," she said.

Almost heaven, West Virginia

Rich and Penny Judd actually owned a small home in a Baltimore suburb, but in 1999 decided they wanted a bigger place to raise a family. Rich needed to be close enough to commute to his government job, so he drew a circle on a map with his workplace at the center.

"I looked on a map to see what was about an hour's drive from my workplace and noticed Harper's Ferry, W.Va., was within the 60-mile radius I drew," Rich Judd said. "So we went out to West Virginia to see what housing prices were like."

• Video: How much house can you buy?

The Judds made their minds up pretty fast. At the time, Rich explained, land was selling for about $8,000 an acre, compared with $90,000 in Maryland and $30,000 to $40,000 in the bigger suburbs where the couple had originally planned to look. They bought a "beautiful" house with a pool on 6.5 acres for $191,000, a place "we never would have been able to afford in Maryland," he said.

Home prices have risen in the area as others have caught on, so the Judds have made some money buying, fixing up and selling various properties. Now they're looking into homes in farther-out areas that haven't had the same run-ups in values, hoping for more bargains.

The Judds don't think the schools that their three daughters attend are quite as good as those in the area they left. But they also note that their girls, ages 7 to 11, and their girls' friends don't have the premature sophistication of city kids; as Rich Judd puts it, they're not "growing up too fast."

The area where the Judds live has fewer entertainment and shopping options than the suburb they left, but Rich Judd said the family doesn't miss those much.

"In short, (there is) not really any downside to speak of for a baby-boomer couple with three young kids," Rich Judd said. "Maybe when we were younger and pre-children it would matter more, but that's probably why we didn't move earlier."

Continued: Finding the right compromise

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