Texas vs. California. Texas vs. California. It’s not as if we haven’t heard enough about that rivalry over the years, but it’s intensified since Texas Gov. Rick Perry’s recent incursion into the Golden State to try to snatch away more of our businesses.
Much of the hometown debate has centered on what Texas really has to offer businesses. Oh, sure, Texas is business friendly, but Southern California lures the world’s brightest and most creative people, crucial for those who need such workers. Texas is a buggy sweatbox vs. California, which has fine weather year round. Texas has fairly low taxes vs. Southern California, which, umm, has fine weather. (For more, see the op-ed on the next page.)
But one thing seemed to be missing in this latest Texas vs. California debate. That’s the price of a house – which is the biggest expense for middle-class folks and a meaningful cost even for wealthy people.
I was reminded of that last week when ZipRealty, a Bay Area online brokerage, sent out a report that looked at the relative affordability of houses in 30 sample cities across the country. California cities were clustered at the bottom because we have the least affordable homes while Texas cities (and you can see this coming, right?) are at the top.
According to ZipRealty, what’s the No. 1 most affordable housing market? Dallas. No. 2? Houston.
If you’re looking for an argument to throw back at Rick Perry, this report might silence you.
Granted, the report was simple and not academically rigorous, but it makes sense and based on U.S. Census data. It said a median-priced house in Los Angeles costs the equivalent of 13.5 times the median household income in the city. In Dallas, the median-priced house costs only 5.27 times the median income.
OK. But most readers of this newspaper aren’t going to buy a median house. If you were thinking of relocating to Dallas, you might go to one of the affluent suburbs with top-rated public schools, perhaps the Lovejoy Independent School District on the northeast edge of that city.
I spent a few minutes cruising the for-sale ads for that area and saw several nice choices. Like this one: A five-bedroom, three-bath home on one-third of an acre with what the listing agent called “amazing mature trees.” At nearly 3,500 square feet, it’s pretty roomy. It has the usual niceties you’ll find in an upper-end home – vaulted ceilings; granite countertops; a walk-in pantry; and floors that are wood, marble and ceramic tile.
A home of that size in Calabasas, which seems like a roughly comparable area, would be listed for about $1.7 million. In Agoura Hills, $1.25 million. The asking price in Dallas: $368,000. Assuming a 20 percent down payment, the monthly payment would come to $1,321.
Gee, at that price, let’s look for something greater. In fact, let’s look at the Westlake area of Dallas, which often has been named the most affluent suburb in America. (It has its own grass runway for residents who want to keep their planes on their estates.)
One listing is for a six-bedroom, nine-bath palace with 10,325 square feet. According to the per-foot data we publish (see page 38), a home that size in the 90210 ZIP code would have an asking price close to $11 million. In Brentwood, $9 million. But this home in the Dallas area could be yours for $2.85 million.
As if he needed it, Perry appears to have another talking point. Say, did I mention that Los Angeles has fine weather?
Charles Crumpley is the editor of the Los Angeles Business Journal. He can be reached at [email protected].
