A fascinating real estate trend in the country has been the relocation from California to Texas or Arizona. In 2019, 7% of the people who left California moved to Texas, while Arizona was second with 2.8% choosing it.
In the last ten years, 10 million people have moved from California to Texas. For Arizona, the figure is 500,000 between 2010 and 2018. This great Exodus has left a question on many people’s minds: “why?”
Though California has the biggest economy in the US, Texas is not too far off. Many cities in the state are currently booming, such as Austin, which has transformed into a technology hub.
The city ranks third for job growth in a metropolitan area, 10th in patent activity, and maintains its reputation as an excellent choice for startups. Recent surveys find that numerous companies are leaving California in favor of the Dallas-Forth Worth area. Job transfers or new employments are the main reason for moving and account for greater than 48% of them in 2019.
Taxes, Traffic, and Unrest
The status of the highest income tax collecting state has marred California’s attractiveness. Its traffic wait time surpasses most other states in the US, and in recent times it has experienced power cuts, fires, and political unrest. Austin and Houston are making great alternatives.
Austin ranked among the best places to live in the nation by World Report and US News. This ranking was based on its low crime rate, accessible city infrastructure, and stable housing market.
The high taxation and strict regulations in California, compared to Arizona, makes the latter more favorable for running a business. Arizona has also been experiencing unrelenting economic growth that is enticing to young labor migrating to the state in droves.
A peculiar explanation for Arizona’s attractiveness is its reputation of being a retirement destination. A lot of people are retiring in the US at the moment, consisting mainly of baby boomers.
There is a relatively lower cost of retirement in Arizona. Boomers can sell their California home and afford a bigger, nicer one in Arizona or opt for a more affordable home, the . Social security benefits are not taxed, and coupled with a more laid back feel and equally fabulous weather; the state makes a great offer.
Median Home Value
This is a common reason for both Arizona and Texas. According to Zillow, California’s median home value of $544,900 far exceeds the national average of $220,100. Texas is below this at $207,301, while Arizona surpasses yet remains affordable at $268,765. Understandably, people will gravitate towards affordable housing options in equally vibrant states.
Because of the high home value in California, two in five households are cost-burdened. This means that they spend over 30% of their income on housing. This makes it harder for employers in the state to develop sustainable middle management by retaining staff in their 30s and do not wish to live with roommates anymore.
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