Everyone is always asking me as a Realtor, why are so many people from California moving to Austin? I always tell them it's quality of life, cost of living, the schools and the people. Texas is where you want to have a flat tire. After living in Chicago, Boston, Miami, and London, coming home to Texas really reminded me of the overall good nature of a native Texan, it is remarkably different.
But to talk about the numbers, a local lender, Steven Johnson sent a fascinating breakdown. See below, and remember Texas has no state income tax, not to mention other things are significantly less expensive - home insurance, groceries, gas etc... it is all more affordable:
I did a little digging on the California state income tax website and the numbers are quite astonishing when you break it down... Just think about the following income scenarios just related to the CA state income tax -
$250k/annual ~ 10.0% state income tax = $25,750/yr = $2,145/mo
$350k/annual ~ 11.0% state income tax = $38,500/yr = $3,208/mo
$500k/annual ~ 11.5% state income tax = $57,500/yr = $4,791/mo
To put it in perspective, a family with a household income of $350k yr, a reasonable CA dual income salary, would be able to purchase a home for approximately $525k with 20% down, the payment would be LESS than what they'd spend in state income tax (see below payment scenario) alone.
P&I - $2096/mo (30 yr fixed at 4.375%)
Tax - $925/mo
Ins. - $150/mo
This REALLY puts it in perspective!!!!
What Steven didn't mention - ask someone from Palo Alto what a $525K home looks like there. In my area, that is a 3,800 SF home with a three car garage, swimming pool, in an exemplary school district. This home doesn't even exist in some Californian markets, so it is impossible to place a value on this.
Texas has no state income tax. When the LeBron James debate was raging over his "decision", commentators were constantly reminding the viewers that it would mean millions in his pocket to choose a state with low to no income tax, versus highly taxed markets such as New York and California. But for the everyday person it adds up too, maybe not millions, but over a lifetime you might be surprised. My son's pre-school is amazing, it's $1,000 per month for full time, five days a week, Boston was going to be $2,800 for the same caliber of program. These factors continue to add up, and I for one appreciate being able to retire earlier. Lastly, everytime I relocate someone from California, they always ask how water is so cheap. Texans think their water bills are high until they talk to someone from California and are absolutely blown away. It's just perspective.
The home shown in this blog post is coming on the market soon, click here for more information.
Thinking about moving to Austin? Just have questions about the area? Email me at firstname.lastname@example.org. We Know Relocation. From movers, to plumbers, we are much more than Realtors.