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Per capita income might be low, but...

Cost of living can offset lower average incomes

It is hardly a secret that Mississippi consistently ranks last in the country in per capita income. In 2003, the average income received per resident was $43,173 in Connecticut, the top state, compared to $23,448 for Mississippi.
However, Mississippi is gaining, having come in sixth in the country for per capita growth in 2003.

But what happens when you figure in the cost of living? Real estate prices are significantly lower in most areas of Mississippi than elsewhere in the country. According to a salary calculator provided by the Web site, www.Realtor.com, to afford the same standard of living that would cost $23,448 in Meridian, you would have to earn $69,730 in Bridgeport, Conn.

While no one is claiming it is exactly good to have the lowest per capita income in the country, things may not be so unequal as it would seem at first blush. Heating costs in the winter can be very high in northern states. And folks in the Magnolia State can be munching on homegrown collards in December and January when northern gardeners are only dreaming about what to plant when it finally thaws out in a few months.

The cost of living can also vary significantly depending on the area of the state. Prices for homes in Old Ocean Springs, for example, are much higher than on the other side of town.
Comparing larger cities in the state, the Realtor.com salary calculator shows that Tupelo and Pascagoula are two of the least expensive cities to live in Mississippi. To afford the same lifestyle earning $23,448 in Meridian, you would need to earn only $22,675 in Pascagoula or $22,761 in Tupelo. That compares to $24,995 in Jackson and $25,606 in Biloxi (maybe those higher insurance premiums for hurricane coverage are at play.)

In border areas of the state, like Pearl River County located near New Orleans, and DeSoto County, near Memphis, the rural and suburban areas compete attractively with higher prices for homes or other real estate in the metropolitan areas.

Jim Flanagan, president of the DeSoto County Economic Development Council, said that while firm figures are hard to come buy, the cost of living in DeSoto County, including home prices and taxes, is lower than in Memphis.

“Housing values have increased very favorably in DeSoto County, but it is still very competitive when it comes to lower property taxes, higher value in public education, and new medical facilities like $175-million expansion at Baptist Memorial Hospital,” Flanagan said.

He pointed to the old real estate adage: The three most important things about real estate are location, location and location. Prices can vary widely with people looking for homes in communities that have favorable retail, cultural and educational amenities.

On the Mississippi Gulf Coast, housing costs considerably less than in neighboring metro New Orleans or Mobile. For example, a home that costs about $153,000 in New Orleans would cost an estimated $100,000 on the Mississippi Gulf Coast, according to the home price index reports available at the Web site www.coldwellbanker.com. A $100,000 home on the Mississippi Gulf Coast would cost about $119,000 in Mobile.

Although the Web site only includes major metropolitan areas, it is safe to say that the $100,000 home on the Mississippi Gulf Coast or $153,000 home in the New Orleans area could be purchased for considerably less in areas of Pearl River County.

Bruce Kammer, 2004 president of the Mississippi Association of Realtors (MAR) and broker-owner of Coldwell Banker Country Properties Inc. in Picayune, said a lot of people are moving out of the New Orleans area attracted by the affordable housing.

“They get to buy a bigger house on more land than in New Orleans,” Kammer said. “They are getting into a better quality of life, a safer environment, less traffic and less crime.”

The same thing is true in George County, which is seeing an increasing number of new transplants from more highly populated areas of the Coast and Mobile — and even elsewhere in the country.

“I think it is a complete package families are looking for,” said Sue Wright, executive director of Greater George County Economic Development Foundation. “Certainly the cost of housing and land would come to mind first regarding cost of living issue. In George County’s case, we are an ‘Agburb,’ a combination of agriculture and urban. We are close to Mobile, the Gulf Coast and Hattiesburg, so people are able to take advantage of the lower cost of living, while also enjoying the urban amenities. There is a much better value for land and family, and it is only a short commute for work.”

Wright said the county even recently attracted a retired school superintendent of education from Portland, Ore.

“He and his family discovered Plum Bluff on the Internet, came here and fell in love with it,” Wright said. “They said it is such a beautiful place to live, and so inexpensive. Then they started citing prices of housing, land and groceries. The price of everything was higher in Oregon.”

What is seen comparing Coastal Mississippi to Mobile and New Orleans is magnified even more when looking at large metropolitan areas of the Northeast. Most of the South has lower per capita incomes than in the Northeast. So why is the South seeing more residential growth and business expansions than in the Northeast? It could be that the mild winters in the South are appealing. Or that there are more new jobs here. And more affordable real estate is a big draw, especially for retirees.

Another measure important to the cost of living is the tax bite. Mississippi has been ranked 13th in the country with a grade of B+ for “wealth-friendliness,” by Bloomberg Wealth Manager magazine. The survey ranks states that do the best job of keeping the wealth in the hands of the breadwinners, not state government.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

About Becky Gillette

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