Navigating the Real Estate Price Dilemma, by Jonathan Rawles

One of the largest obstacles to relocation is the high prices of land and homes in desirable retreat areas. With mortgage rates rising, but prices still high, affordability is taking another hit. As a brief example, a recent search on Zillow for homes in Boundary County, Idaho with the criteria of 2,000 square feet and 20 acres returned only four results, starting with a rustic off-grid cabin at $850,000.

There are many factors playing into this, including a limited supply, high demand, and a skewed market. Rural areas hold only 20% of current housing supply and 10% of new builds. Even a relatively small percentage increase of suburban-to-rural migration translates to a huge increase in demand.

Further, new builds in rural areas incur the full site preparation and utility development costs for each home, rather than having these costs spread over an entire subdivision. The market is further skewed by rural zoning ordinances that limit density, preventing small “semi-rural” developments that could help balance the market demand. To top it off, 20 years of artificially low mortgage rates have produced astronomical inflation in real estate prices.

These days, I see several broad archetypes of relocatees, who each face unique challenges and opportunities in the current market:

– The “hermit” is willing to live as simply as necessary, and would prefer to be extremely remote. They are often frustrated by prices being so high even in these remote areas. They do have decent odds of finding something. They have the advantage of being willing to live much more remotely and in more rustic conditions than almost anyone else. Additionally, they are often location independent in income, due to retirement, pension, or extreme frugality.

– In contrast, the “deep pockets” buyer is comfortable with a price in the millions, but typically has a very particular set of requirements. This is a very small subset of buyers, but clear evidence that with enough money you can get almost anything you want. The challenge here is finding a property that meets both their lifestyle, location, and survival criteria at once.

– The “blue city refugee” is typically looking to get out of their current location to somewhere more culturally friendly. They often have the additional constraints of needing access to work or educational opportunities. They often end up settling in a red-state suburb, glad to finally be out of the big city.

– The “classic retreater” is looking for a home on acreage with a private, defendable location, good water resources, and off-grid or self-sufficiency potential. They typically face the challenge of matching a moderate purchase budget with their ideal property requirements.
I’m particularly addressing the challenges faced by the last category, but all of them share some similarities.

The Property Factors

Selecting a property comes with a multi-pronged dilemma of balancing competing property criteria against your total purchase budget.

Location

First, you have the property location. This is one of the most significant factors for price. Nationwide, there is a large divergence in prices. This is most obvious between the high-cost coastal states, compared to parts of the southwest and midwest, with the mountain states falling somewhere in between. This is a major factor playing into your affordability decision, but for now, I’ll assume you’ve already determined your budget and where you are going.

Locally, price depends very much on desirability and access, typically highest around the city center, then decreasing as commute distances increase, with higher and lower prices in more or less desirable areas.

The location is critical both in survivability and livability. For survivability, the location subjects the property to existential threats if it’s in a high wildfire hazard area or floodplain. But livability is equally important, in that it determines the longevity of the property as *your* retreat. This means that it can’t be too remote for you to have access to the resources needed to make a living, keep sane, and keep your family content and socially connected.

Long commutes are sometimes necessary, but almost always a negative factor to quality of life. There are only so many hours in the day, and adding 10 hours of commuting to your workweek along with the extra chores that come with rural living will limit your capacity for other practical preparedness projects. I encourage folks that will be working full time to keep their commute under 40 minutes if at all possible, and strongly encourage them to not take on a commute that’s more than an hour.

House Value

Second, you have the house value. The main contributors are build quality, total square footage, age, and condition. You’ll universally pay more for a nice custom-built home, and less for an extremely rustic DIY-homestead build. Price also increases directly with total square footage, or with the number of bedrooms and bathrooms. Finally, the price depends on the age and current condition, with a premium for new-build and well-kept homes, while fixer-uppers may be comparatively cheap, but come with additional costs.

The house matters because you and your family spend a good portion of your time there. Especially in northern latitudes, outdoor activities become less appealing during months of rain, snow, and wind. Especially if it’s a novel experience, living with a fixer-upper or rustic cabin can be frustrating and taxing. Problematic plumbing, electrical, or HVAC systems can be a thorn in your side, along with structural, mold, or water problems.

Land Value

Finally, the land value. Multiple factors contribute to your land cost. Acreage is most obvious, but can vary significantly. Land that is level and buildable, farmable, and usable will command a premium over steep, rocky, or swampy ground. Nice timber, an established garden or orchard, or especially live water on the property will all significantly increase the price.

The land you purchase will set the future limits on what you can achieve in terms of self-sufficiency, privacy, and security. If you have the choice, more acreage is desirable. But because it’s so expensive in most areas, it’s wise to consider how much land you really need to achieve your goals.

A Personal Assessment

How you balance this dilemma is a personal matter. It depends on your own stage of life and priorities, and that of each of your family members. It calls for a careful assessment of each family member, and how they will be impacted by the decision. You may find that even if you enjoy a remote lifestyle, your spouse or kids may not find the same appreciation for it, or may struggle to meet its demands.

Consider your capacity for living far from most amenities, and traveling on rough roads. Depending on the area, you may be dealing with several months of snowy, icy, and muddy conditions. Your spouse or kids will have to contend with the same roads for errands, work, or social opportunities. An extremely remote location can have an isolating aspect, where simply getting there or leaving takes significant time and energy.

Consider your family’s space requirements. Specifically, the space you need while snowed in due to the conditions described above. Consider bedrooms, bathrooms, an office, schoolroom, or playroom, space for in-laws, and necessary utility, storage, and garage space.

Make a realistic assessment of your capability for doing home renovations, based on your budget, time, and expertise. Along with this, consider your family members’ tolerance for living in the middle of a fixer-upper, or living long-term in very rustic conditions. There are a lot of rural homes out there that never saw a building inspection, and would give any professional tradesman nightmares. Be realistic about the potential hardships of living off-grid or in a very old or oddly-built house.

Consider your access to necessary services and amenities. You will likely need regular access to a grocery store, hardware store, and big box store, as well as church and school or homeschool co-op.

Consider the different dynamics that rural living gives to social life. The shared rural conditions can promote a sense of charity and neighborliness, but they come with a live-and-let-live approach to personal beliefs and values. In rural areas, you get what you get with neighbors, which may well include hippies, atheists, retirees, homesteaders, and rednecks. Finding like-minded friends can actually be much more challenging. Pay particular attention to this for your kids, as they may even eventually be looking for marriage prospects.

Detail your self-sufficiency goals for your property, taking into consideration your own aptitudes, abilities, and the time and money that you have to invest into these projects. This might include off-grid power, water, a garden, orchard, and large or small livestock. Figure out how much actual usable acreage these goals will require. Consider whether some of these can be accomplished on less acreage by stacking functions and with more intensive cultivation.

In Conclusion

The selection of your new property is an important task that will have a major impact on the long-term success of your relocation.

Maintain balance. Don’t optimize for one factor at the expense of others. The law of diminishing returns is at play here. You will potentially get great value from the move from a quarter acre to one acre, but the step from 5 acres to 6 acres is much less significant. You can get the most from your budget by weighing the added benefits against the sacrifices in other areas. For example, is an extra bedroom or bathroom worth an extra 15 minutes on your commute?

Plan for affordability through economic downturns. There may be no major SHTF event in your lifetime, but we may be in for decades of stagnation, recession, and decline. Your property should help secure you against the rising cost of living, high fuel costs, and a depressed economy, rather than being a liability. When the economy is tanking, it is better for a family to be secure in a modest home, than to have the ideal property, but being at risk of foreclosure.

Finally, plan for living. Survivability should be oriented towards the life of your household, and accommodate and support it as much as possible. Make your property decisions with an eye to what lies ahead, including children growing up, elder care, aging, and other life changes. An effective relocation is not just a temporary response to a crisis, but should provide permanent benefit to your family.

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