If you live in California, you’ve probably seen a lot of news reports about Californians moving to Texas. If you’ve wondered “why is everyone moving to Texas” and whether you should too, here are some things to consider.
Things In Common
These states have more similarities than people seem to realize. They’re both huge states with a variety of terrains. Both states have mountains, rivers, deserts, and beaches. Both states have a rich blend of Mexican and American culture. Both states have world-famous sports teams at both the college and professional levels, with state-of-the-art arenas. Both states are diverse cultural centers with a huge and growing variety of cuisine, music and visual arts events.
Of course there are some pretty big differences too.
Cost of Living Comparison
California is a beautiful state with a huge and dynamic economy, but it’s one of the least affordable places for a resident or a business owner. MERIC (Missouri Economic Research and Information Center) computes a cost of living index for each state by averaging the indices of the cities and metro areas in that state. According to MERIC’s analysis of all cost of living factors, Texas ranks 15th in the country for affordability. Compare this to California, who now ranks down at 48.
The average value of a home in California is $745,200 according to Zillow. The average home value in Texas is only $282,726, 38% of the California price. Rent costs show a similar contrast. Here are the latest rent averages according to Realtor.com, for major metro areas in each state:
$1769 – Austin / Round Rock
$1615 – Dallas / Fort Worth / Arlington
$1399 – Houston The Woodlands Sugar Land
$1377 – San Antonio New Braunfels
$2982 – Los Angeles
$2618 – Riverside-San Bernardino-Ontario, CA
$2064 – Sacramento / Roseville / Arden-Arcade
$3025 – San Diego / Carlsbad
$2975 – San Francisco / Oakland / Hayward
$3062 – San Jose / Sunnyvale / Santa Clara
NerdWallet has an online calculator that lets you compare the cost of living between two cities. Since many tech workers are moving to Austin from San Francisco, let’s compare the living costs for those two cities.
If you’ve been making $100,000 (before taxes) in San Francisco, you’ll only have to make $50,525 in Austin to maintain the same standard of living. Housing costs are 71% lower, transportation costs are 34% lower, food costs are 27% lower, entertainment costs are 24% lower, and health care costs are 16% lower in Austin compared to San Francisco. The analysis also compares schools, and shows that public schools in Austin have the same average score as schools in San Francisco according to GreatSchools.com.
Texas has no personal income tax at all, which has attracted a lot of residents. In contrast, California taxes personal income as much as 12.3% for high-earners. Remember, that’s in addition to federal income tax.
California also has one of the highest corporate tax rates in the country, at 8.84%. Texas doesn’t have a corporate tax, but does have a tax on gross receipts. This can be very complicated to calculate and depends on a number of factors, but on average it’s a much smaller burden than the California corporate tax.
Texas isn’t the best rated state on unemployment, but California is ranked much worse according to the labor department. As of December 2021, Texas was ranked 37 for all states plus DC, with an unemployment rate of 5 percent. California was ranked dead last at 51, with an unemployment rate of 6.5 percent. That’s a big difference, and a driving factor for migration to Texas from California.
Since so many people have been moving to Texas from California lately, there have been more moving companies dedicated to helping people facilitate that move. This competition helps price, but of course the higher demand elevates the price. Moving companies would prefer an equilibrium, in which every long-distance move from A to B is followed by a paid return move in the opposite direction. Since the migration has been so lopsided, these companies often drive their moving vans back to California empty, so that time and fuel is wasted. U-HAUL reports data for inbound and outbound trailers. Texas ranks number one for inbound trailers, while California ranks dead last at 50th place. This means there’s a glut of empty trailers in Texas, and rental prices reflect this.
It’s hard to compare such big states to each other in terms of climate, but there are some general truths. Texas is, on average, a hotter state than California. This can be a dramatic adjustment for you if you’re moving from a northern California area with a high elevation (and thus, cool temperatures) to a hot south Texas city like San Antonio. Texas also gets more rain than California. Texas averages 29 inches of precipitation per year compared to California’s 19 inches. Looking at annual temperature, California averages 59.4 degrees while Texas averages 64.8, so it’s not a deal-breaker for most people but worth noting.
If you need help moving from California to Texas, call Firefighting’s Finest Moving & Storage. We are dedicated to providing efficient, safe, and professional commercial and home moving services, as the moving partner you can rely on. Founded in 2001 by two off-duty firefighters, we’ve grown to serve not only the Dallas/Fort Worth area, but also Houston and Austin as well. A locally-owned-and-operated business, we exceed all state and federal requirements for a moving company and can handle all of your moving needs. Call 844-715-6625 or visit our website for an estimate.