45 minutes outside of Chicago you can get a decent size, newish house for 3-400k. That’s up from pre covid but still very much trade-down-able for someone sitting on a paid off house in the Bay Area or Greater NYC.

It used to be that the move from Chicago to about an hour outside Chicago would be “big enough” to make it worthwhile. And being only an hour away is different than across the country.

I’m not sure that’s as much the case anymore.

Well that’s now a different claim.

When I was growing up in the suburbs of NYC, everyone’s grandparents moved to Florida. That’s further away than Chicago.

You can get a decent-sized, newish house for 300-400k in a desirable neighborhood inside the city of Chicago, on the Blue Line, and then of course in a variety of inner-ring suburbs (Forest Park, Skokie, Berwyn, Niles). You definitely don't need to take a 45 minute commute to buy a house in Chicago on that budget.

That's even worse. If everything was uniformly expensive, it wouldn't encourage people to move away from talent hotspots. But the differential prices means it's a drag on labor and thus productivity.

Midwest prices are nowhere near California prices. Not even moderately close. The only place that might be remotely true is Chicago.

I have some properties I track, the CA one used to be 5x the Midwest one, now it’s only about 2-2.5x.

Chicagoland prices are much lower than California prices, even in high-demand areas.

Chicagoland prices factor in high levels of state and city debt. Someone moving to Chicago from out of state is essentially taking on an extra $85K of debt. While residents aren't directly personally liable for those debts, they should expect higher taxes and lower service levels in the future. A municipal bankruptcy is possible.

https://www.wsj.com/articles/chicago-will-need-a-miracle-to-...

California and it's large cities have their own fiscal problems but generally not as bad.

I don't know. I'm pretty well acquainted with the Chicagoland fiscal situation, which is real and ugly, and this "add $85k" thing seems like a just-so story. Can you show your work getting to that figure?

It's probably some math involving "unfunded liabilities" that the government has (usually oversized pensions or something).

This can cause a cascade where the governmental entity that has the liabilities keeps raising taxes on its constituents so they keep moving outward to the suburbs or away.

Detroit is a famous example of this, but it's happened to other areas (cities have gone bankrupt before).