Why are homes so cheap? (Dallas, Plano: sales, homeowners insurance, high crime) - Texas (TX) - City-Data Forum

BSL63087 · 03-01-2007, 12:18 PM

What makes homes in the Dallas/Ft.Worth area so cheap? I'm looking at Phoenix, Denver, and the Dallas/Ft. Worth area for possible relocation areas. I'm from Southern Indiana and can transfer basically anywhere I want as long as there is a job opening in the area I go to and I obviously need to be able to afford it. I definitly want to go to one of the three, they all offer what I'm looking for and I'm basically just looking at the financial part of it at this point. I'm looking to get something in the mid 100 thousands (125,000-150,000 ish), and I'm having trouble making a decision because I'm afraid I'm going to end up getting myself into a situation I won't be able to afford. I'm taking trips to Denver and Dallas next month to check out the areas and gather more information that I may need to make my decision.

My main question though, what makes homes in the D/FW area so cheap? Phoenix and Denver both seem over-priced. The median home price in PHX is $350,000, Denver is around $250,000 and Dallas is around $125,000. Dallas is likely going to be my choice for that reason, but I'm wondering if there is some kind of catch on why the prices are so cheap or what? It seems almost too good to be true really. Sure Dallas has pretty brutal summers, high crime in certain areas, and tornado threats and all of that, but every city has negative things about them so I don't see how that could keep the prices down. Has the housing market there just not boomed as big as places like Denver and PHX or what? Do you see the housing prices skyrocketing anytime in the near future (5-10 years) like they did in Phoenix especially?

Basically my main concern is will living in Dallas really end up being significantly cheaper than Phoenix or Denver? Dallas probably wouldn't be my first choice of the 3 if money were no object, but taking that into consideration, I would easily choose Dallas over the other two if it really is significantly cheaper to live there.

Any help/info is appreciated. Thanks in advance.

kawgpz550 · 03-01-2007, 12:34 PM

I think the biggest reason, that I can tell, is because the property taxes are high. Some others will probably offer better explanations.

Roma · 03-01-2007, 01:16 PM

I'll give it a shot.
The reason to me is some of what you already mentioned (weather and stuff).
But here are some more....Besides the weather, it is so spread out. There is alot of land yet to be built on. Supply and demand raises home prices and there is plenty of supply and land here for the demand. And like Kawgpz550 said, Property taxes are high (you feel it) even if there is no state tax. You mix everything together and you get lower priced homes. But also remember it is also location that raises home prices and not all homes in Texas are cheap. If you want to live in a less desirable area then yes they will be cheaper. But if you want to live in a nicer area it will cost more. But compared to some other states, yes it is cheaper in Texas.

dallasbound · 03-01-2007, 01:46 PM

I am also moving to Dallas from the Seattle area where houses are very expensive. Initially it does seem that homes are very inexpensive in the Dallas area. Some of the things to consider that increase the monthly cost of owning a home in Dallas are: 1) very high property taxes (2-3 time what we currently pay), 2) high homeowners insurance (about triple what we currently pay), 3) higher car insurance premiums (about double), 4) higher utility costs (about triple). When you add this to your mortgage payment the homes are not so cheap. Yes, there is no income tax (we don’t have that in Washington either) but you have sales tax. Another thing that has surprised me is that home builders in Dallas us aluminum windows. They stopped using those in new construction here about 12-15 years ago. They are cheap but do not last and generally need replacing (it seems) after less than 5 years. We have looked at several homes in Plano that were less than 5 years old with windows that are failing (seals fail and condensation/moisture gets caught between the panes of glass). The warranty on these windows is very short. We have owned 2 newer homes in the past 10 years in the Pacific NW with vinyl windows which have a lifetime warranty. Anyway, this is another thing to factor in to your cost of ownership.

onrway2clt · 03-01-2007, 02:06 PM

Quote:

Originally Posted by dallasbound

I am also moving to Dallas from the Seattle area where houses are very expensive. Initially it does seem that homes are very inexpensive in the Dallas area. Some of the things to consider that increase the monthly cost of owning a home in Dallas are: 1) very high property taxes (2-3 time what we currently pay), 2) high homeowners insurance (about triple what we currently pay), 3) higher car insurance premiums (about double), 4) higher utility costs (about triple). When you add this to your mortgage payment the homes are not so cheap. Yes, there is no income tax (we don’t have that in Washington either) but you have sales tax. Another thing that has surprised me is that home builders in Dallas us aluminum windows. They stopped using those in new construction here about 12-15 years ago. They are cheap but do not last and generally need replacing (it seems) after less than 5 years. We have looked at several homes in Plano that were less than 5 years old with windows that are failing (seals fail and condensation/moisture gets caught between the panes of glass). The warranty on these windows is very short. We have owned 2 newer homes in the past 10 years in the Pacific NW with vinyl windows which have a lifetime warranty. Anyway, this is another thing to factor in to your cost of ownership.

But that is just where you are from. Compared to NY, the taxes would be halved. Home insurance is the same, car insurance is the same. It depends on where you are coming from.

So you purchased a home? Did you meet with Jeff?

Starfishlady · 03-01-2007, 02:09 PM

I've been researching the same thing. I'm in Orlando and I couldn't believe that with only 140,000, I could have double the house I have here. I don't have all the links available, but I found that construction is very different in Texas. My husband freaked out actually when we read the reports. Research contruction and yes there is more land available so that was also a factor. I really think we will get what we pay for. I was so naive to homebuilding, I just thought that every company builds the same in every state?? According to goverment records, The State of Texas has negative contruction.

BSL63087 · 03-01-2007, 02:13 PM

Quote:

Originally Posted by Roma

I'll give it a shot.
The reason to me is some of what you already mentioned (weather and stuff).
But here are some more....Besides the weather, it is so spread out. There is alot of land yet to be built on. Supply and demand raises home prices and there is plenty of supply and land here for the demand. And like Kawgpz550 said, Property taxes are high (you feel it) even if there is no state tax. You mix everything together and you get lower priced homes. But also remember it is also location that raises home prices and not all homes in Texas are cheap. If you want to live in a less desirable area then yes they will be cheaper. But if you want to live in a nicer area it will cost more. But compared to some other states, yes it is cheaper in Texas.

Ok thanks. In the research I've done so far it looks like I can get what I'm looking for for about $130,000 in D/FW and the same house in either PHX or Denver in a similar neighborhood would be at least $250,000+. I'm looking for something newer, either brand new or less than about 10 years old. Not necessarily looking for anything too upscale, just a nice newer quiet middle class neighborhood. From what I read, the Dallas metro area has a lot of newer subdivisions particularly in the suburbs.

Starfishlady · 03-01-2007, 02:15 PM

With all that said, I still want a home there?? Is that crazy of me?? There's a big chance that we might have problems with the quality of our home and or the home won't last us 30 years. This relo process has been so stressful.

BSL63087 · 03-01-2007, 02:18 PM

Quote:

Originally Posted by dallasbound

I am also moving to Dallas from the Seattle area where houses are very expensive. Initially it does seem that homes are very inexpensive in the Dallas area. Some of the things to consider that increase the monthly cost of owning a home in Dallas are: 1) very high property taxes (2-3 time what we currently pay), 2) high homeowners insurance (about triple what we currently pay), 3) higher car insurance premiums (about double), 4) higher utility costs (about triple). When you add this to your mortgage payment the homes are not so cheap. Yes, there is no income tax (we don’t have that in Washington either) but you have sales tax. Another thing that has surprised me is that home builders in Dallas us aluminum windows. They stopped using those in new construction here about 12-15 years ago. They are cheap but do not last and generally need replacing (it seems) after less than 5 years. We have looked at several homes in Plano that were less than 5 years old with windows that are failing (seals fail and condensation/moisture gets caught between the panes of glass). The warranty on these windows is very short. We have owned 2 newer homes in the past 10 years in the Pacific NW with vinyl windows which have a lifetime warranty. Anyway, this is another thing to factor in to your cost of ownership.

Very helpful, thank you.

That gives me more things to consider. I would rather pay more for the home and less for insurance and utilities than pay less for the home and more for insurance and utilities.

I would guess the taxes and home owner's insurance in Texas are probably at least double what it is here in Indiana so that gives me a better idea. I agree with starfishlady, you are probably going to get what you pay for.

onrway2clt · 03-01-2007, 02:22 PM

Quote:

Originally Posted by Starfishlady

With all that said, I still want a home there?? Is that crazy of me?? There's a big chance that we might have problems with the quality of our home and or the home won't last us 30 years. This relo process has been so stressful.

It depends on the builder. No matter where you buy, a home that costs you $140,000 is not going to be of the greatest quality.