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Why buying a home in Texas is a much better choice than buying in California or New York city.



So New York has experienced a mass wealth flight in the past 6 months time and the city will never be the same again that it was prior to the COVID-19 pandemic.


And this just feels horrible, but there is a very weak leadership in the city when it comes to the elected politicians and we can not see that the commercial or the residential real estate bounce back ever to the levels it was prior to the Covid-19 pandemic.

So New York is backsliding right now back to the crime levels of the 1980s and that is not good for the city and more and more people are looking to leave the city.

And in California and Los Angeles there is a huge problem with inventory sitting and becoming stale even if many news outlets would like you to believe that the housing market is heating up again, it is not, they are just playing around with numbers.

And now there are even talks about raising taxes up to 54% in California, it just sounds nuts to any sane person!

So let us start with stating once again that we have nothing against California or New York city , what so ever.

But also as real-estate expert i have to point out the huge differences that we can see between these three markets, and we will also explain why so many people and families are leaving California and instead are moving to Texas.

Let us just look very simply at an average hard working family of which both parents are working full time in New York city or Los Angeles.

Let us say that their combine income is 220.000 dollars each year pretax.

They are working mid level jobs and non of them are management.

So let us look at California and Los Angeles for say to begin with, and what we can clearly see is that the average home price is around 700.000 dollars.

This is a truth with some serious modifications to it, you do not get pretty much anything for a family these days in the Los Angeles metro area for under one million dollars.

But actually you will pay at least 2 million dollars if you want to live in a decent house in a decent neighborhood.

We are not talking Beverly hills, Brentwood, Malibu, Bel air, when we are talking about the 2 million dollar mark.

We are more talking about areas like Los Feliz, Hollywood hills east, Tarzana, Sherman oaks, and the last one here Sherman oaks have been a big family driven area for the past 10 years time and the prices have gone up a lot during that time frame in the VALLEY.


The real estate prices are now in 2019 higher than they where before the great recession in 2007-2008, and where the bubble busted in 2008-2009.

So this is the home-buying situation in California, and in the San Fran area, the so called bay area and it is even worse in areas close to the silicon valley area.

Then if we look at the property taxes they are around 0.79% in California and you have a sales tax at around 6%.

So now you might jump out of your seat and say hey mrlifeadvise, that is actually a much lower property tax than the national average which is around 1.5%.

That is a very true statement, but then keep in mind how much more a home costs to buy in California compered to Texas for say.

So there is no reason to think that the migration from California to Texas will stop anytime soon.

All of you know, when you have a 1-1.5 million dollar budget and you end up looking at a dump in Silver lake, that is way to small for your family, or something more of a new construction in North Hollywood for instance, you feel dirt poor.

Or should we use the well known NEW expression (house poor).

Simply for hard working Americans , you will have trouble finding a good family home and still make a life for yourself and your family.

Because when your mortgage and HOA and other fees , electricity , garbage, water comes into play not to mention the property taxes, forget the restaurants and the other fun activities for your family, without maxing out your credit cards very quickly along the way.

So California is a losing proposition right now , when it comes to keeping hard working families inside its city and state limits.


So New York has even a bigger problem than California has with its real estate prices and an average home costs around 800.000 dollars, and the same goes with new York as with Los Angeles you really need to take this sum and triple it, if you want something a little bit better than a dump.

New Tork city.

If we look at the property taxes , we are looking at an average of 2.5% give or take, and the sales tax is ball park at 9%.

So then you say, you dont have to live in the Manhattan, you can live in Queens or Harlem and Brooklyn.

That is very true, but once again if you are looking at a home from 1-2 million dollars you will have to live outside of Manhattan with your family to avoid a total dump!.

And the prices have rapidly gone up in Brooklyn , the Park slope area mainly over the past 6-8 years time.

And Harlem is also changing rapidly, so the prices are also going up there also.

So the one benefit that New York has on Los Angeles is that they have a fully functioning subway system that can help you out with your commute back and from your place of work.

(I know Los Angeles has a subway system , but good luck riding it around the city) this is from someone who knows the LA from the inside and out, commute wise.

So here you have the same high costs for all the extras like Water,Garbage and electricity,property taxes, but you also have very high costs of child care if you are two working adults.

In Los Angeles, you can find undocumented child care (nannies) who will help you cut a piece of your child care costs.

This is a bit more uncommon in New York, even if it of course also exists there.

So once again, a lot of people are migrating also from New York to Texas.

And the young people usually opts for the very HIPP , Austin, area, and families usually goes for the Dallas and Houston metro areas , where there are a lot work possibilities.

So now let us talk about Texas and what really drives people to Texas?.

First of all compered to Los Angeles and New York city you dont have a personal income tax to pay, which is huge.

The real estate market is an outlet price market or if you want to call it a bargain market compered to LA and NYC.


So if we look at Texas the medium home price is somewhere around 197-199 thousand dollars.

And Dallas has an average home price in 2019 at around 212.000 dollars.

Houston has an average home price of 290.000 dollars.

And Austin has the highest of these three places with an average home price of 301.000 dollars which is a rise of almost 40% in a ten year period, which is a lot!.

So the same goes here as for LA and NYC, you have to increase your budget price if you want something better and in a better area.

But compared to LA and NYC you only in most cases have to double your budget from the medium home price in Texas compared to almost having to triple it in the other two cities like LA and in the NYC.

So for around 400.000-600.000 dollars you get a really nice family home in these cities.

And the one thing we also have to look at is that even if Texas has a 1.86% property tax which is almost double to the national average in America the home prices are much lower, the so called(assessed) prices, which the tax is normally calculated from.

The sale tax is around 8.5-8.8% in Texas, which is on the higher side for sure.

So for a family bringing home 200.000+ dollars each year pretax, the Texas migrating is very understandable if you are coming from California or New York city.

Where this take home pay is almost at a poverty level, which feels almost ridiculous to say out load, but it is in these two cities.

Simply put, you will get much more bang for your buck, in Texas than you get in these two other places.

And your salaries will not be much lower in Texas, if lower at all!.

Specially if you work mid level in a company and you have a lot of skills to bring to an employer but you are not management.

And every parent knows how good it feels to be able to bring your kids on that holiday or let them play hockey which is an expensive sport to play today.

Because you have money left over for that, you are not house poor in Texas, and your mortgage is not keeping you up at night.

So then someone might come and say, but hey there is so much more to do in LA and in the NYC than you have to do in Texas.

And i usually answer when somebody leaves a comment like that, in this way.

In Los Angeles the most overrated place is the beach, and on an average an Angeleno will visit the beach once a year.

So if we take away the beach, from this equation what else does LA have that Dallas for instance does not have?.

So usually there is no good answer to that question.

So you can ask yourself this question, why am i paying true my nose to live in California?.

And the same question goes out to the people residing in NYC, why am i paying true my nose to live here in this concrete jungle?.

Of course there are more to do in the NYC than there is in Dallas, but Dallas has enough to do without getting boring to live in.

And Texas is also as a great state to raise a family in.

There are a lot of good and healthy family values in Texas.

So mrlifeadvise fully understand why families and people are emigrating out from the LA and NYC METRO AREAS into TEXAS.

So because some people feel that i might be attacking LA and the NYC this is not true at all.

I actually like both cities a lot, but to raise a family in these cities has just gotten harder, and harder for each year, and if you look back 25+ years it is like night and day, to get the ends to meet on a monthly basis.

So then some of you might answer me like this, my job is in LA or NYC , and i can not move!.

Then my question to you is this, have you even tried to look around in cheaper states for a similar job, or a job that you can handle, with your education and work experience level.

Please remember that it does not always have to be the exact same job description, usually you can do much more than you think you can.

I know what i am talking about, i made a big mistake in my life buying a home for my family for 1.7 m dollars when we could actually only afford a 1.2 million dollar home at that time.

So we lived in a great area, but we had no extra money to do anything, even if i liked the area a lot the 30 min move to a neighboring area made all the difference in how the family lived on a daily basis.

And it created so much tension with in the family, so after a 5 year period we did down grade to a 1.2 million dollar home and we here no longer house poor!.

So i understand the urge when you are bidding on a home that you love,and your family loves, but please always think twice about, can you actually afford this home or not?

The bidding wars are one of the most scary things when it comes to buying a home.

The urgency to get the place makes you do stupid financial things, in the heat of the moment.

And usually you want to take a step back when you are 10% over your budget for a home.

I usually say that the 10% mark you might be able to swing, but when a home goes from 1 million dollars to 1.3 in a bidding war you should usually step out from it before you make a huge mistake for you and your families future.

Thanks for reading.


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