How does housing costs and wages relate across the country?

[Chris Clemptor]

Hello,

    It's well known that prices of houses are very different in various parts of the country.  It seems like houses are cheaper in the Southeast of the US, but wages are also lower in general in those areas.  My understanding is that places like New York are expensive but wages are also higher there.  I make sense of this by thinking the same percent of your job wages are going to housing, so in a way it all equals out in the end.  Assuming that was the case, it always made more sense to live in a place with high wages and high cost of living because if the same percentage of your wages went to savings, you would have more savings. It makes sense to me to retire in the Southeast of the USA like Florida because houses are cheaper and since you are no longer working (retired) your money simply goes further there.  If you have no money coming in, just live in the least expensive state, makes sense. 

    I don't understand why Florida has inexpensive housing if it's bases on supply and demand.  They have a high population density.  Wouldn't a high population density show demand and therefore raise the cost of housing?

  More confusing is that the relationship of high wages/high cost of living  and low wages/low cost of living simply does not happen in a ton of places? Most places?  Its confusing as to exactly how this works out.  I currently live in Minneapolis and I like the idea of moving to Denver.  The current average house in Denver is about 200k more than Minneapolis.  Also, I'm a plumber and when I look up average wages of plumbers, they make like 7 dollars less per hour in Denver.  If I moved there, it would be a negative in the both ways.  I feel like I've never truly wrapped my head around this concept.  I can understand that more people want to live in Denver than Minneapolis so it has a higher "demand." But where it gets confusing how this all works out big picture over time is that you need a large percentage of low wage and medium wage workers to make your city function. Logically, more of your wages are now going just to housing, so you won't be able to spend money on other things, so it would seem logical that certain not as essential businesses won't exist in that city.  Also it would make sense you won't be able to save as much money because all that is now going to the cost of housing.

    I could move to San Diego and be even worse off.  I could buy 3 houses in Minneapolis compared to the price of 1 in San Diego, and to add insult to injury make the least at my job.     Somebody must be gaining for this?  Are the people who really profited from the this the original buyers of the property before it skyrocketed in value?  Does the disparity between rich and poor grow that much more in places with low wages and high cost of living?  I've been confused on how this all works.  I've never really understood how most people ever buy a house in California.

Thanks