I don't get it.. house prices in CA vs. TX (Los Angeles: buyers, income)

[Undulator]

Ok so you're paying a premium for land in CA (Los Angeles), but even still.. You can get 8,000+ SF of good land in Woodland Hills for ~$300K. Say a comparable strip is $50K in Austin, TX. How come you see McMansions in TX for $400-500K, and in Woodland Hills you only start seeing them upwards $1.5M? Something doesn't add up here. Are building costs that much higher or are people simply paying a premium for a nice looking house as well as the premium on the land? The inventory in Woodland Hills in the $600-800K range is crap. Classic American single story tract homes from the 50s with no curb appeal whatsoever. Why isn't it possible to build a McMansion in Woodland Hills for $700K? At the even pretty generous $200/SQ building price a 3+2 2000 SF home only adds up to $700K including land. Then why is it that all I'm looking at in that range are ****holes from the 50s?

[Lima_beans]

Actually the Austin land and housing prices (IN the city) have been skyrocketing as well the last couple of years =/

[hsw]

Many cheap newer houses in LA region are in Calabasas or Irvine...efficiencies of scale of a developer/builder, rather than doing a one-off in ancient places like WoodlandHills...

Hard to compare costs btwn regions....land quality really varies, esp in CA w/many fault zones; building costs (due to seismic issues) are prob higher....pricing per acre can plummet in some suburban areas where homes typically sit on 3-4 acres, not puny <0.5ac lots....and, in built-up areas like BevHills, often need to buy an inhabitable house for its desirable land and tear it down to build a latest-tech house...

In BeverlyHills an acre of premium land (N of Sunset, in City, not BHPO) is some $10MM...but can sometimes get bulk discount on Westside....e.g., 3+ acs in Brentwood (Country Ests) is some $3.5MM/ac....

IIRC, a desirable acre of land in Dallas' Highland Park is some $7MM...so much for the cheap TX land argument...

Would compare LA's Westside land prices vs SF Peninsula and NYC's Greenwich....LA's Westside is far more costly than SF's Atherton ($5MM/ac); Woodside ($1.5MM/ac) and NYC's Greenwich (a rather cheap $800K/ac)...

[BRinSM]

it simple economics, supply and demand. if people in austin were willing to pay $1MM to live there, then sellers would ask that much. however, that is not the case, so sellers ask for what they know buyers are willing to pay.

[Sorcerer68]

We have ultra high desirability and superior opportunities for income.

[CESpeed]

There are two reasons that spring to mind: 1) People are under the misguided impression that money and jobs grow on trees here and all they have to do is show up and they'll become a star or at least rich. 2) Prices in certain areas are as high as they are because the rich and famous don't want to mingle with the common folk so they price the houses in the areas where they live so high that regular people cannot afford to live near them.

[streetscenes]

Originally Posted by Undulator

How come you see McMansions in TX for $400-500K, and in Woodland Hills you only start seeing them upwards $1.5M? Something doesn't add up here. Are building costs that much higher or are people simply paying a premium for a nice looking house as well as the premium on the land? The inventory in Woodland Hills in the $600-800K range is crap. Classic American single story tract homes from the 50s with no curb appeal whatsoever. Why isn't it possible to build a McMansion in Woodland Hills for $700K? At the even pretty generous $200/SQ building price a 3+2 2000 SF home only adds up to $700K including land. Then why is it that all I'm looking at in that range are ****holes from the 50s?

Part of your confusion is your premise. I wouldn't consider a 3BR/2BA house at 2,000SF a "McMansion", more like a 3,500SF home with 4BR/5BA and all new fits this criteria. Also the $200/SF to build this type of house is low. With all the bells and whistles these house costs between $250 and $300 a SF. So with a 3,500SF house at $250/SF building costs are $875,000 plus a lot of $300,000 (not sure you can find one of those) you are into it for $1,175,000. Let's say the builder wants a 10% profit (most want 20% or more) that means the house would have to sell for +/- $1,300,000. A couple of years ago they were building these properites left and right in Woodland Hills and selling them for 1.5 mil, now they would be lucky to get $1,100,000 or $1,200,000.

[allenk893]

Originally Posted by CESpeed

There are two reasons that spring to mind: 1) People are under the misguided impression that money and jobs grow on trees here and all they have to do is show up and they'll become a star or at least rich. 2) Prices in certain areas are as high as they are because the rich and famous don't want to mingle with the common folk so they price the houses in the areas where they live so high that regular people cannot afford to live near them.

Wow you practically read my mind lol. But yeah you were spot on because that's exactly why I would relocate there! I always had this weird child-like belief that If I moved there, I would find some way to suddenly become a big time professional working actor.

[CravenClan]

Don't forget, the taxes in texas are BIG, just like the state of Texas!! We looked into moving there last year, and somer were as high as 3.17%....That is insane on a high dollar home there!!!

[Lima_beans]

Originally Posted by CravenClan

Don't forget, the taxes in texas are BIG, just like the state of Texas!! We looked into moving there last year, and somer were as high as 3.17%....That is insane on a high dollar home there!!!

Yeah, property taxes are high. No state income tax though.