California natives (and long time residents — DE FACTO “natives”) have no idea how and WHY housing in other states is far less expensive than in the Golden State. Indeed, many don’t even grasp the magnitude of the price gap. When it comes to the price gap, I’m here to help.
Many folks love (or HATE) to compare California with Texas. Let’s start there with home prices.
According to Zillow, here’s the median price of homes as of March, 2017:
- TX: $163,500
- CA: $493,800
- U.S.: $196,500
Hence CA homes are roughly TRIPLE the cost of Texas homes. And consider this — there are 18 states with median home prices lower than Texas!
Let’s look at the big picture. The CA median home price is 151% higher than the national average. But that’s not a proper comparison. Since CA homes constitute about 10% of the nation’s entire national home stock, CA sky-high prices skew the national average. Compared to the average of just the other 49 states, CA median home prices are 202% higher. In other words, the CA median home price is TRIPLE the median home price in the other 49 states.
Three other thoughts:
1. Only Hawaii has a higher home price average than CA (21% higher). In Hawaii, they have to import almost everything to BUILD a house, and (like CA) greatly restrict home building. But the California property tax RATE is TRIPLE the Hawaii rate.
2. The third highest priced state is Massachusetts. The MA median home price is $369,400 — a whopping $124,400 lower than CA.
3. These high CA home prices translate into very large CA property tax BILLS — in spite of the protections afforded by Prop 13. Yes, we have a lower property tax RATE than most other states. But the tax is figured on our FAR higher property tax values. According to my research, the median CA homeowner property tax bill (even including the long held properties) is 93% higher than the average bill paid in the other 49 states.