What you pay for: Texas versus California

I’ve spent the last six days in northern California, and nestled among the beautiful Redwoods, there are some valuable real estate lessons.

RENTING

California: I’m staying in a lovely rental property for which the tenants are paying over $2,000/ month.  The 980 square foot two-bedroom, one-bath property in an upscale neighborhood comes with an enclosed garage that floods when it rains.  And the tenants are thrilled to have it!  Reportedly, when looking for alternative properties, the lowest price available for a similar property was over $3K/ month, and the competition was incredibly steep.

Texas:  I live in a 4/2/2 2,200 sq. ft. rental property in Texas in a golf course neighborhood and pay less than $1,400/ month.  Admittedly, I got a good deal- similar properties in my neighborhood are now renting for around $1,600/ month.

BUYING

California: In the Atherton, CA, area, homes for sale are listed as high as $12M and as low as $1.1M (for a 2-bedroom bungalow.)

Texas: In as similar a real estate area as I can find (Highland Park area of Dallas, near Dallas Country Club) home prices range from $7.8M (8-bedroom palatial estate) to a meager 3-bedroom, 3-bathroom 2,000 sq. ft. $729,000 beauty.

DETAILS:

Why the discrepancy from one state to another?  In northern California, you’ll find the tech industry has upheld the economy nicely, and as my host this week has said “I’m not an expert, but businesses aren’t closing, and judging from the Tessla dealership down the street, things are going quite well here.”  In Texas, we’ve suffered fewer economic woes than other states, and our economy is much stronger than most.  So again, why the difference in cost of living?

The simplest answer I’ve found this week:

Because most people would rather see this out of their bedroom window…

 

 

 

 

 

 

 

Than this…

 

 

 

 

 

 

 

 

 

While there are of course numerous other factors contributing to property price discrepancies, the biggest factor comes down to space and demand.  There are an awfully lot of Californians looking for housing (I mentioned the competition facing renters in this area of California) and the living quarters are smaller.

The population of Texas, after all, is around 25 million.  And California’s is 37 million.  You’ve got to put all those people somewhere!