the "living in California surtax"

[REWahoo]

The article says that "there are more people leaving California than there are arriving there. 566,986 people left the Golden State in 2012, for states like Texas, Nevada, Washington, and Arizona, presumably for the lower cost of living."

Yeahbut 493,641 moved to the Golden State in 2012 - that's a huge number. Wish we knew how many of those were rebounds...

 

[NW-Bound]

More need to leave and the traffic congestion to get a lot better before I even consider living there, even if money is no object.

Sure, it has a lot of attractions, but takes you an entire day of breathing exhaust fumes to get there.

And while I am at it, there are so many other cities that I feel the same way about. However, naming them all will not leave me with too many friends here.

 

[mpeirce]

California living can involve some tricky timing questions. Particularly when looking back!

I lived in the SF Bay area for quite a few years and sold my house in 1999 prior to moving to Oregon. The proceeds from the sale allowed me to buy a nice property with acreage in Oregon free and clear to realize both of our dreams - my wife's dream of acreage with plenty of critters on it and my dream of giving a nice raspberry to the work world. The tricky timing issue is that if we had remained in the bay area for another five years or so that same house would have sold for a cool million dollars instead of the $400 K I got for it. Oh well - easy come easy go.

The cycles in the real estate market are interesting...

I owned three homes in San Jose, California. On two I made money, the other I lost money on. It all depends on when you buy/sell in the cycle.

My first home was a one bedroom condo. Lived there a couple of years and made about 20% on it. I sold at a peak.

Next up was a family sized townhouse. When we moved out of that one (into a larger house for our larger family) we had to write a check at closing to pay off the mortgage. Yes, after a buying at a peak and selling at a trough, we lost all our downpayment and mortgage payments. Luckily I was able to do some serious consulting work to make enough money to get a downpayment for the next house. I was motivated.

The last house we sold to move away from California. On that house we made almost 50% - and it was moderately expensive house to begin with.

By moving we could buy a much nicer house on a good size lot in an outer suburb of Columbus - nice area with excellent schools. AND we had enough profit left over to finance most of one of the kids' college expenses.

Ups and down. Time it right and good things happen. Time it wrong and you lose money. Ain't life fun!

(14 years later, we still live in and love the house outside of Columbus)

 

[martyp]

I hear that statement frequently yet the census info below says ~500,000 people per year move from other US states to California. Maybe it isn't the one-way trip it appears to be?

Restless America: state-to-state migration in 2012

Of course people move here but they take the financial hit.

 

[rodi]

No argument from me about traffic. One of my reasons for retiring was traffic. My 6.5 mile commute went from 20 minutes 10 years ago to 40mins/1hour of late. Qualcomm expanding, freeway construction, more banking/traffic in the UTC area made for a nasty 805 south commute out of Mira Mesa. My boss lived in Otay Mesa for part of my tenure - it sometimes took him 2 hours to go the 20 miles... if he missed his teeny window of "good" traffic.


I do *not* miss my commute.

 

[Kimo]

When I worked in California 35 years ago I lived in La Crescenta and worked in Garden Grove....I would hate to think what that drive looks like now.....but as I sat in traffic I remember that my boss lived in Thousand Oaks....from Ventura County, through LA County into Orange County, now that is a morning and evening commute!

 

[aja8888]

I think part of the equation is also home appreciation. Zillow shows a house we once owned in Texas valued at only 50% more than we sold it for decades later, so the home value has not kept up with inflation. Our house here cost twice as much initially, but has increased in value at double the rate of inflation. And property taxes on both houses are almost identical currently because of Prop 13 in California.

Zillow is all wet, as far as I am concerned. Especially when it comes to putting fair market value on Texas homes. I started reviewing two of our houses last year to see what they would predict (ours and DD's newer house). First matter of business is that home sales prices in Texas are not made public to anyone who does not have a RE license. So, presumably, Zillow is shielded from that data. (I guess they are, anyway)

Case; DD bought a 2000 sq.ft. tract home in Spring, Texas in a very nice subdivision of ~100 homes, surrounded by homes up to a couple million dollars (Creekside, The Woodlands and Augusta Pines.

Her home is one level built in 2007, brick and hardi on the outside, granite counters, fireplace, indoor laundry, etc. She paid $127,000 in late 2012. A nice home for a starter family (which she has not started BTW ).

In the last 6 months, Zillow has priced that home from mid $130K to $212K. Then after the $212K valuation, they dropped it to $156K. Now how can anybody in their right mind deal with that crazy data?

Oh, the Zillow valuation on our house was 15% less than what we sold it for in March of this year. And we sold it in one day.

 

[urn2bfree]

Average physician salaries in California are lower than just about every other region in the country. Definitely a factor in keeping us from moving there to work.
Being a doc is hard enough without taking a salary cut-- however, retiring to California- with downsizing expected, etc-, is definitely a possibility.

 

[Rich_by_the_Bay]

It's not just housing. Food and gas cost more here in California. But I wouldn't live anywhere else.

While the COL here is and likely will remain high, we were pleasantly surprised by:

• Being a 1-car family - light rail and walking meet 90% of our routine transportation needs and our condo provides shuttle service to SF weekly. Immediately saved thousands on insurance, maintenance, gasoline.
• Property tax is high but comparable to the last two states we have lived in it is minimally more (desirable older neighborhoods).
• Leisure activities, the free or inexpensive kind, are close, and we can make day trips for the next 20 years without running out of ideas.

Comparisons between dissimilar areas are difficult to make - figure out the weather, lifestyle and financial impact of your choices. There are a lot of ways to enjoy where you live.

 

[meierlde]

Zillow is all wet, as far as I am concerned. Especially when it comes to putting fair market value on Texas homes. I started reviewing two of our houses last year to see what they would predict (ours and DD's newer house). First matter of business is that home sales prices in Texas are not made public to anyone who does not have a RE license. So, presumably, Zillow is shielded from that data. (I guess they are, anyway)

Case; DD bought a 2000 sq.ft. tract home in Spring, Texas in a very nice subdivision of ~100 homes, surrounded by homes up to a couple million dollars (Creekside, The Woodlands and Augusta Pines.

Her home is one level built in 2007, brick and hardi on the outside, granite counters, fireplace, indoor laundry, etc. She paid $127,000 in late 2012. A nice home for a starter family (which she has not started BTW ).

In the last 6 months, Zillow has priced that home from mid $130K to $212K. Then after the $212K valuation, they dropped it to $156K. Now how can anybody in their right mind deal with that crazy data?

Oh, the Zillow valuation on our house was 15% less than what we sold it for in March of this year. And we sold it in one day.

However the assessed value of homes in Tx is online. Further the law does say that the assessment districts should keep up with full value. It does seem from some observation that the assesment districts do get sales prices. (In my neighborhood one vacant lot sold and the land value on vacant lots nearby went up that year). When I lived in Houston, I saw the assessed value drop in the late 1980s and recover by 2005 (to a bit more than I got for the house when I sold it). So you can use the assessed value to cross check with Zillow.

 

[aja8888]

However the assessed value of homes in Tx is online. Further the law does say that the assessment districts should keep up with full value. It does seem from some observation that the assesment districts do get sales prices. (In my neighborhood one vacant lot sold and the land value on vacant lots nearby went up that year). When I lived in Houston, I saw the assessed value drop in the late 1980s and recover by 2005 (to a bit more than I got for the house when I sold it). So you can use the assessed value to cross check with Zillow.

Daughter's house was reassessed this Spring at a value of $146,000, much closer to the last Zillow estimate of $156,000. But I can't explain the $212,000 valuation Zillow made earlier this year.

Houses are going for absurd prices around this end of Houston due to the new Exxon complex being built in the neighborhood. That will bring in roughly 8,000 Exxon employees by end of 2015. The flurry of buyers and rising prices remind me of the years I spent in Ventura County northwest of Los Angeles.

 

[longranger]

Lately the biggest concern for me being happy in Southern California for the long term is increasing population density. Where I live now was mixed rural and new suburbs 25 years ago. Now it is mixed suburbs and semiurban with terrible traffic and less serene vistas. The built out areas within 30 minutes of the coast or metro areas that have class and charm are too expensive for us to RE. Even if we find a little refuge just outside the current hot markets I worry that within a decade we will be absorbed into the giant suburban traffic jam that is much of socal. Guess that is the tradeoff for the climate.

 

[daylatedollarshort]

Zillow is all wet, as far as I am concerned. Especially when it comes to putting fair market value on Texas homes.

I just used our old house on Zillow as an example. Housing in Texas is around $99 sq foot and San Francisco itself is $853, with the suburbs usually coming in varying amount lower.

The initial price of a house is one consideration, but potential appreciation may offset a higher initial cost. I have been intrigued with housing options like straw bale houses a family could build themselves for a low cost, but with a limited resale market, little chance of appreciation and usually a lot not in a walkable area I think just buying a condo that might appreciate more could actually cost less in the long run. So my only point was initial cost isn't the only factor for housing costs and Prop 13 is very advantageous to long term home owners, so the housing costs here are not always as bad as they seem at first glance.

 

[robnplunder]

I did a living expense exercise between staying put in CA vs moving to Florida. There was about 17% difference in expense, and much of that was due to housing (and golf which is cheaper in FL, all things being equal). 17% surtax for better climate, closer to relatives, etc? I can live with that.

 

[aja8888]

I just used our old house on Zillow as an example. Housing in Texas is around $99 sq foot and San Francisco itself is $853, with the suburbs usually coming in varying amount lower.

The initial price of a house is one consideration, but potential appreciation may offset a higher initial cost. I have been intrigued with housing options like straw bale houses a family could build themselves for a low cost, but with a limited resale market, little chance of appreciation and usually a lot not in a walkable area I think just buying a condo that might appreciate more could actually cost less in the long run. So my only point was initial cost isn't the only factor for housing costs and Prop 13 is very advantageous to long term home owners, so the housing costs here are not always as bad as they seem at first glance.

Prop 13 was good when I lived in CA as we paid $229,000 in 1983 for our home (taxes about $2400/yr). Who bought it and paid $800K+ had to pay 4 times the property tax as it used to be based on 1.25% of the new purchase price.

Another thing that used to grab me was even though property tax can't rise under Prop 13, the communities float bonds to pay for town improvements, etc, then you get to pay those back on your tax statement as separate line items. I remember on our tax bill we had a list of those bond paybacks that totaled about 1/2 the property tax. So they get you anyway.

On Texas housing prices being $99/square foot? Where did you get that? Is that a state average, or something? Housing prices are rising faster than a hot summer moon around here and the square footage is remaining the same. While we are certainly not at SF rates yet, I see $300+ a square foot in some local areas of new construction. Things have changed in Texas the last few years with the energy boom.

 

[explanade]

Why would people want to live near a big Exxon facility unless you worked there?

Presuming this is an office building complex, not a refinery or anything with oil or gas processing?

 

[REWahoo]

Why would people want to live near a big Exxon facility unless you worked there?

Or conducted business with those who did.

Presuming this is an office building complex...

+1

In total, the complex will house 10,000 people when it opens in 2015.

February 2014: The new Exxon Mobil corporate campus

 

[REWahoo]

Housing in Texas is around $99 sq foot...

Can you post the source of this info? It sure doesn't sound like the Texas I live in.

 

[daylatedollarshort]

Can you post the source of this info? It sure doesn't sound like the Texas I live in.

Texas Home Prices and Home Values - Zillow

http://www.zillow.com/houston-tx/home-values/

I am sorry if my post offended people who live in Texas. If the median is $99 for then half the homes will be more than that per sq ft. I took the sq ft price of my old house and it matched the Zillow median sq ft price for Texas as a whole, and both were around $99 a sq ft.

My only point was that the initial price of a house may not be the biggest indicator of its financial value, and housing in California for longer term residents may not necessarily be a bad investment, especially with Prop 13. I am very, very, very, very sorry I used my old house (which just happened to be in Texas) as an example.

 

[bmcgonig]

Prop 13 was good when I lived in CA as we paid $229,000 in 1983 for our home (taxes about $2400/yr). Who bought it and paid $800K+ had to pay 4 times the property tax as it used to be based on 1.25% of the new purchase price.

Another thing that used to grab me was even though property tax can't rise under Prop 13, the communities float bonds to pay for town improvements, etc, then you get to pay those back on your tax statement as separate line items. I remember on our tax bill we had a list of those bond paybacks that totaled about 1/2 the property tax. So they get you anyway.

On Texas housing prices being $99/square foot? Where did you get that? Is that a state average, or something? Housing prices are rising faster than a hot summer moon around here and the square footage is remaining the same. While we are certainly not at SF rates yet, I see $300+ a square foot in some local areas of new construction. Things have changed in Texas the last few years with the energy boom.

I've been looking around using Trulia and I've seen nice houses outside Houston for under $100/sq ft. I.e., around $500k for a nice 5000sq ft house. In fact I'm looking at one right now on trulia : 4990 sq ft, $459000, large lot, swimming pool, gorgeous kitchen.

 

[REWahoo]

Texas Home Prices and Home Values - Zillow

Houston Home Prices and Home Values - Zillow

I am sorry if my post offended people who live in Texas. If the median is $99 for then half the homes will be more than that per sq ft. I took the sq ft price of my old house and it matched the Zillow median sq ft price for Texas as a whole, and both were around $99 a sq ft.

My only point was that the initial price of a house may not be the biggest indicator of its financial value, and housing in California for longer term residents may not necessarily be a bad investment, especially with Prop 13. I am very, very, very, very sorry I used my old house (which just happened to be in Texas) as an example.

Not really offended, just a bit surprised at the numbers and wondering where they came from. Thanks for the source info.

BTW, I think a far more valid comparison would be using the $ per SQ FT in a Texas city rather than the state itself. San Francisco (232 square miles) vs. Texas (268,820 square miles) isn't apples to apples. The numbers won't change by much - Houston $/SF is $138 and Dallas is $145.

EDIT: Zillow says the median price per SQ FT for California is $255.

 

[aja8888]

Why would people want to live near a big Exxon facility unless you worked there?

Presuming this is an office building complex, not a refinery or anything with oil or gas processing?

Yes, it happens to be the largest private commercial project in the U.S. at the moment. It will bring a lot of new jobs to the area as Exxon will be closing and relocating services from several parts of the country. The corporate office in Falls Village, Va is one of the main offices being shut down.

It's just part of the U.S. energy business continuing consolidation to Texas and specifically the area north of Houston.

 

[explanade]

The new Apple Campus they're building, the Norman Foster flying saucer building, is suppose to host 10,000 employees as well.

But it's one big building, not several.

The way these tech company campuses are built, with the perks they offer, there isn't as much benefit for local businesses. For instance, cafeterias usually offer nicer, healthier food at subsidized prices or free to employees. Various concierge services discourage people from leaving campus at all.

On a per square foot basis, I think retail space brings in more tax revenues to the city than corporate office buildings.

Now, the tech companies pay their employees a lot more than retail businesses but often, they also bus these employees from other cities, often San Francisco, rather than Santa Clara Valley.

Google is acquiring more and more land near their main campus and the suspicion is that they will build a company town of sorts, with housing included for employees.

 

[haha]

Now, the tech companies pay their employees a lot more than retail businesses but often, they also bus these employees from other cities, often San Francisco, rather than Santa Clara Valley.

This is fairly new, and because the Valley has become such a boring soulless place, whereas San Francisco is now and always has been a very attractive city. Attractive enough that techies pay a big rent premium to live up there. And, there is an increasing amount of programmer type employment in SF.

Microsoft runs a similar bus service called The Connector, to take employees from close in Seattle neighborhoods to Redmond. It's a subset of employees though, I think the large majority of MS workers live on the Eastside.

Ha

 

[NW-Bound]

...I think the large majority of MS workers live on the Eastside.

That's true for two of my wife's nieces, who work at MS. They do not get paid the bigger bucks or loads of options like employees of some gogo Internet companies.