Ryan Petersen’s roots in Orange County, California, run deep. Both his grandparents and parents were the original owners of their homes in Southern California and raised families there.
But Petersen, 25, says he didn’t see a future for himself in the state.
In 2021, Petersen and his wife, Erika Dominguez, found themselves struggling to make ends meet with the high costs of rent.
“We were paying $2,400 a month for an 800-square-foot, one-bedroom apartment,” says Petersen, who worked for a startup at the time. To help make ends meet, he also did side gigs for “Instacart and DoorDash in the evenings while one car was out being rented on Turo.”
The couple moved to Texas.
They are not the only ones.
Is it really worth it to move to Texas?
The reasons behind a California-to-Texas move are varied. But affordability, job options and politics are major drivers, say experts. The Lone Star state draws people who like its policy of no income tax, lower cost of living, and job opportunities in the tech and energy industries.
The median value of a home in California was 2.7 times higher than in Texas in 2021, according to 2021 American Community 1-Year Estimates, making the move to Texas attractive for first-time homebuyers. For existing homeowners, the move would offer them a chance to bank a tidy sum of money from the sale of their home.
In 2021, leaving California for Texas was the most popular interstate move in the country, with 111,000 people – or 300 people a day – making the change. The exodus that year represented an 80% increase from 2012, according to an analysis of U.S. Census and IPUMS data by StorageCafé.
The number of people leaving the Golden State for Texas grew by 36% in 2021 compared with 2016 while the migration stream from all other states to Texas did not change, rising 0.1%, according to data from the American Community Survey 5-Year Estimates.
‘Bidding and losing on more than 20 homes’
Facing a $500 rent hike in June 2022, Petersen and Dominguez decided in January that it was time to purchase a condo. To buy one in the $500,000 to $650,000 range at a 3.75% mortgage rate, it looked cheaper to buy than rent.
“But we kept getting outbid on condos and townhomes, and we’d get outbid by 150 grand. Some of the places didn’t even get back to us,” Petersen says.
While they bid on more than a dozen homes and lost, they only could view a few.
“The lines were cut off at 9 a.m. There were too many people,” he says. “My father had been a broker for 25 years and he had never seen these lines in his entire career. I mean, I’m talking lines that went out of the development down the street.”
While his parents had moved to Texas the previous year after selling their house for a tidy profit, Petersen, and his wife, who met as MBA students at Biola University, a private Christian University in Southern California, had never considered the move until their frenzied house-hunting experience.
‘Wait, I can have that?’
Soon they zeroed in on the Dallas area.
“I just don’t vibe with the culture down in Austin and Houston. It’s more LA and I was trying to get away from that,” he says.
When they started looking in Dallas, they realized that homes in the $400,000 to $500,000 range would get them four bedrooms with an office, three bathrooms, and 2,800 to 3,000 square feet.”
But the Dallas market was also hot.
“There were a couple of homes, same story, got outbid by six figures. But those were like designer homes,” says Petersen. “But they were in our price points, which was also the more shocking factor, ‘Like, wait, I can have that?’”
In May 2022, they bought a four-bedroom, three-bath, 2,800 square feet home with an office on a 9,000-square-foot lot for $500,000 − $25,000 above asking.
Is it really cheaper to live in Texas?
Buying a home in the Dallas area as opposed to one in San Jose can result in savings of over $1 million, on average, as the home price difference between Santa Clara and Dallas counties is a whopping 258%, according to the analysis by StorageCafe, which provides listings for self-storage facilities across the U.S.
While property tax rates tend to be lower in California, the quality of homes in Texas at lower price points and lack of state income taxes more than make up for it, say recent transplants.
While housing affordability and taxes are surely playing a role, broader political differences about the role of government in society could also be a factor in some migration decisions, say researchers at the Public Policy Institute of California.
“Conservatives feeling unrepresented in state government might be drawn to states that they see as a better ideological fit,” wrote Eric McGhee and Hans Johnson, senior fellows at the institute. “For people already inclined to leave California for other reasons, politics might push them to finally pack their bags.”
There are signs of this pattern in the institute’s statewide surveys.
While 26% of very liberal respondents say the state’s high housing costs have made them seriously consider moving out of state, 39% of middle-of-the-road respondents and 45% of very conservative respondents say the same.
Not having to ‘hide political beliefs’
Marie Bailey, 44, who grew up in Orange County, moved to Texas six years ago after getting fed up with the high cost of living, traffic and public policy issues in California.
Oh, and the taxes, she said.
“It just felt like no matter what, they just want to tax you in all these different ways,” she said. “It’s not just state income tax, it’s not just property taxes. There are extra fees to register cars.”
At one point, she wanted to start a business but she found the red tape so extensive that she ultimately gave up the idea.
The business-friendly environment in Texas has been touted by some high-profile movers such as Elon Musk and Joe Rogan, who relocated some parts of their business there. In fact, 100 companies moved their headquarters to Texas since 2020, with 40% of them coming from California.
Around the 2016 elections, politics was so divisive in the Golden State that Bailey says she felt conservatives she knew in the state had to hide their views.
A Facebook group Bailey started in 2016 for people thinking of moving from California to Texas now has 45,000 members.
“There are a lot of people that literally pretend for the sake of just keeping their jobs,” she said.
She now lives in Prosper, Texas, about 45 minutes from Dallas, in a new 5,000-square-foot house she and her husband built for about $780,000
“That’s about what we sold our 1,500 square-foot house in Seal Beach for,” says Bailey, who now works as a realtor.
More:A move from California to Texas could save a million dollars. Many Americans are opting in
Escape from ‘the asylum’: Paying taxes for things he didn’t believe in
Bill Ross, 65, who was born and raised in the New York metropolitan area, first moved to California in 1990 for a tech job in Silicon Valley.
While he loved California weather, mountains and the ocean, he didn’t care much for Silicon Valley’s “homogenous” culture, he says.
People only seemed to want to talk about technology and little else, he says.
“It was all keeping up with Jones’ lifestyle,” he says.
Still, what kept him in the area was the great school district he says he thought his kids had access to.
But the pandemic and subsequent extended remote schooling experience in California, he says, revealed the warts. And the state’s public policy decisions had been getting on Ross’s nerves for a long time.
He described the “decrepit” infrastructure, the homogeneity of political views and not being able to have a dissenting opinion, especially on the state’s expanded social programs for undocumented immigrants and the state’s rising unhoused population.
Ross says he was paying high taxes for things that he didn’t believe in.
“The priorities are just all misplaced,” he said. “I mean, we really felt like we were living in an asylum, and when we left, we felt like we escaped from the asylum.”
Two years ago, he sold the 1,900-square-foot house he bought in 1997 for $365,000 in the Santa Cruz mountains for $1.5 million.
His new home in Boerne, Texas, near San Antonio, is a four-bedroom, 3,225-square foot home with a home office, pool, outdoor kitchen, fruit trees and fenced yard.
He bought it for $631,000 in July 2021.
“So when people move here from California, they can literally take the equity in their home in California, buy a brand new home here in cash, furnish it, buy a new car, and put money in the bank,” he says.
Is California or Texas better?
Moving to Texas has to be a holistic decision, says Petersen, the Gen Z transplant.
The weather has been an adjustment. Being able to live near the beach, go hiking and snowboarding and surfing all on the same day is not an option. And don’t get him started on the food options, which are not nearly to the level in Orange County, he says.
“We’re missing a lot of our favorite Mexican and sushi places,” he says. “Here in Texas, we find it’s really just business owners trying to capitalize on a cuisine and they don’t know how to make it right.”
He imparts this piece of advice for would-be movers.
“Sit down and crunch the numbers and make an educated decision,” he says. “Not just quantitatively, but qualitatively.”
Swapna Venugopal Ramaswamy is a housing and economy correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our Daily Money newsletter here.
