Is C.O.L. in TX really less? (Dallas, El Paso: for sale, vehicle registration)

[SprintRider]

Okay, everywhere I look, I'm told the cost of living is so much less in TX, but I just can't see it. Where am I going wrong?
My figures, based on my averages and numbers I've gathered from reading this forum:
CA:
Taxes: 3,400.00
Homeowners ins: 2,000.00
Cable: 1,200.00
Phone: 600.00
Electric: 1200.00
Water: 1,200.00
Gas (I live in an all electric home..will never do it again): 0
TOTAL: 9,600.00

TX:
Taxes: 8,000.00
Homeowners ins: 2,000.00
Cable: 1,200.00
Phone: 600.00
Electric: 4,800.00
Gas: 2,400.00
Water: 120.00
Total: 19,120.00

I'm told that TX doesn't have state income tax, so it makes up for the difference in the high property tax. On 70,000.00, I would pay 4,381.35 CA state tax. The total difference in living in TX vs. CA is 9,520.00. Now, if I subtract the 4,381.35 in CA income tax, the total comes down to 5138.65. That means that even taking the state income tax into consideration, it still costs over 5,000.00 more per year to live in TX. However, I do agree that the difference between the TX property tax and the CA state income tax almost becomes a wash. I guess the TX utilities are the killer here though.

What am I doing wrong? At best, I could change a few numbers and it MIGHT come closer to even.

According to a cost of living calculator, if I were making 70,000.00 in Orange County, I could get along at my same level of living making 42,723.75 in Dallas. How do they figure this?

[socketz]

8000 in taxes in TX buys you a brand new 3500 sq/ft semi-custom home in a posh burb with all the trimmings (granite, stainless, textured walls, 18" tile, etc.).

3400 in taxes in CA buys you ? I paid 5k per year in CA and I was in a simple cookie cutter 1800 sq/ft home in a 1% tax district. 3400 would put you in maybe a 350k 2Bdr condo ?

Also, COL is more than just the home prices. I believe it also includes fuel and other costs as well. For example, gas here is about 40 cents per gallon cheaper. My Home Owners insurance and Auto Insurance is also cheaper than CA.

I guess you'd need to compare apples to apples to get better numbers.

However, in the end, there is not a huge difference the way many believe. Where the difference really lies is in the quality of home you live in here will most likely be 3x the quality of the home in CA. But there are many, many people in CA that would not trade their 1800 sq ft 1980s tract home for a 3300 sq ft semi custom home in TX.

[SprintRider]

You're right, I did this all wrong. I totally forgot that I'm locked in on Prop 13. I was comparing apples to apples as far as the home size and quality, aside from considering the tax break.

Thank's for restoring my faith, socketz. I could just stay here, but I'm just getting so fed up with So. Cal.

How much is gas going for there now? I just paid 2.85 the other day. It's not going to stay that low for long though.

[lh_newbie]

Sockets has it right. Let's dive into housing a little.

If you want to compare housing costs, you have to compare equivalent housing - not just the same price home. Let's take an 1800 sq ft 3/2 home, in a middle class neighborhood, good schools and not be in the middle of nowhere.

In California, this may cost you $500-600K; in TX - $150-200K.

Let's use the low number ($500K) for California, so you'd have $5K in property taxes. I don't know what home owners insurance is in CA, but I'll use your $2K figure. We'll also say that cable, phone and water bills are equal. We'll exclude gas/elec for just a moment. So we have roughly $7K in insurance and property taxes.

Now, in TX, let's use the high number - $200K. We have a 2.5% property tax, so that's $5K. Insurance on a $200K home will be $1K on the high end. We will again exclude utilities. So we have roughly $6K.

Equivalent homes would cost less in TX. I'm not sure where you got the $4800 and $2400 numbers for gas and electric. I own a 1976 home. I upgraded my HVAC and put in lots of insulation in my attic. I graph out my utility bills (yeah, I'm a geek) so I know what our budget needs to be. Our house is 2600 sq ft, so it's much larger than our example, but we can use my numbers. Gas and electric, combined and averaged for the whole year is $200/month - or $2400/year. That's $1200 more than your sample in California.

Based on that, I think it's safe to say basically housing costs from an operating expense perspective are equal for equal sized/located housing between both states. But then you look at a mortgage:

Let's assume you put 20% down on both homes and get an unbelievably low 6% mortgage for a 30-year fixed. Your P&I for the CA house is $2400; the TX house is $1000. That's $1400 per month in the bank, each and every month in Texas. Granted, the TX home is probably not going to appreciate like the home in California, but that isn't guaranteed... and you can easily put your $1400 per month in the bank.

At the end of paying off your mortgage:

- In TX, you would have put $504K toward retiring... and if you earned 8% on that money (easily achievable over 30 years), you'd have $1.78 million sitting in an account and a house paid-in-full.
- In California, you'd have to sell your home and move somewhere cheaper if you needed that equity to live off of (or do a reverse mortgage).

Call me silly, but the last thing I want to do when I retire is have to sell my house and move. In TX, gas prices are about 50 cents/gallon cheaper. I think groceries are about the same. Restaurants are cheaper in TX also. Vehicle registration is dirt cheap here (under $100).

Hopefully this helps to put things into perspective.

Brian

[SprintRider]

Well, you'e both eased my mind a little. I guess the main thing that bothered me is the cost of electricity in TX. I searched the forums and saw many people saying that they pay 500.00 and some as much as 1,000.00 per month! That's just absurd! I looked at the kwh cost between CA and there, and didn't see that much of a difference. I can only imagine that people paying these high bills must leave every TV and light on in the house 24/7! Well, there's the fact that Dallas is warmer than here also, but I still can't see the bill being so high. Perhaps it is for some people, but I just can't fathom it.

Back to the weather though... I just looked up where I live and Dallas on the weather site and I see a difference, but not a HUGE one. The record high in Dallas was 115 in 1909 and the record high here was 108 in 2004. Also, the bigest difference seems to be about 13 degrees higher for Dallas in the month of June. It appears that the big differences last for four months... May-August. I know that these charts can be quite deceiving and should be taken with a grain of salt, but I still can't see why electric bills (considering our kwh charges are very close) to be four and five times in Dallas as it is here.

[KewGee]

I lived in Southern CA for 28 years with A/C. I would assume that is still feasible today. We would have a few hot days, but it cooled off really nicely at night. I can only remember a few times when sleeping was a tad uncomfortable. The heat didn't last long like it does for 5 months in TX.

[SprintRider]

KewGee, I think you meant living without A/C?

I pretty much run the A/C here from June-Sept. You're right about it cooling off at night in So. Cal. I still run the A/C though. I have a two story house with zoned A/C. One upstairs and one for downstairs. I also have a heat pump, which means I'm basically running it in the winter also. I live in a 1935 Spanish style home with poor insulation and old double-hung windows. I also have two refrigerators, a freezer, washer and electric dryer, a couple of computers on 24/7, security lighting on all night and a heated jacuzzi, etc. I have never paid much over 250.00 for electricity though and the times I did was when it was over 100 for days at a time.

[FarNorthDallas]

When I lived in San Diego, I never lived in a place with A/C. That would be impossible in Dallas. I also saw cars for sale without A/C in San Diego and I didn't even know that was possible. It's really tough to not have A/C in your car in Dallas. To me there is significant difference in temperature.

We run the A/C in out house from late March to early Nov. If it's a cooler day during that time period we turn it off and open the windows, but it's just a few days here and there. 30 years ago we were okay running the A/C just Memorial Day to Labor Day, but that's just not possible anymore.

[KewGee]

Originally Posted by SprintRider

KewGee, I think you meant living without A/C?

You are so right; I definitely meant WITHOUT A/C not WITH. Thanks for catching my mistake.

FarNorthDallas ~ You reminded me that I never had A/C in my vehicle either in So. Cal. My mom and I took a trip to Fort Worth from Burbank, CA in 1968 in my brand new little Datsun, no A/C. This was in May and we almost croaked. We survived AZ and NM but once we traveled past El Paso, we we're dying of the heat. Gosh, I can't imagine doing that in August. I was only 20 years old at the time. When I got to Fort Worth, I begged my sister to move back to CA, but her husband was a Texan and wouldn't. And now, here I am in Texas and have been since 1978.

Without A/C everywhere, I surely would have hurt myself by now.

[KantLockeMeIn]

Yeah, the electric comparison looks off. We for the most part have the theromostat down to 74 most of the time (I work from home) downstairs, and 74 upstairs for 8 hours and 79 for 16 hours. It's a 4700 sqft home, and we're paying around $300 in the summer and $120 in the winter.

I should add, it's a brand new home, so it's 13 seer a/c units and higher overall efficiency. We've also replaced many of the lights with CFL. But we're computer geeks and have at least 3 computers on at any given time, and tons of electronics (DVRs, Slingbox, routers, switches) going 24/7 as well. It's probably $2100 for the year.

We have gas for hot water, cooktop, and heat. The bill ranges from $25 summer or $120 winter for gas. I'd guess that would work out to $750 a year.