Over the past year, there has been a large influx of people and businesses moving to Texas. Recently, Tesla CEO Elon Musk has announced that he will be relocating his company’s headquarters from Palo Alto, California to Austin. Other companies like Hewlett-Packard and Oracle have relocated to major cities like Austin, Dallas, and Houston. These companies weren’t the first to decide about moving out.
Many sought to take advantage of the State’s climate, but many simply wanted to get better jobs, pay less in income tax, and buy a more affordable home. According to a report by the Associated Press, more than 4.2 million people have migrated to the Lone Star State since the 2010 U.S. Census. Many of these people came from larger metros such as New York City and Los Angeles.
Moving to Texas has been in everyone’s minds since the start of the pandemic, but you wouldn’t want to join the bandwagon and decide on moving to Texas without preparation. You still need to determine if you can afford the cost of living in Texas cities.
This guide will give you an idea of the cost of living in Texas before you make your move. You will find information on essentials such as rent prices, healthcare, and utility costs so you can transition smoothly as you settle in the Lone Star State.
Real Estate Market in Texas
You don’t have to type “companies that buy houses in Arlington” to know how much you will need to purchase a home. According to Zillow, the median home value in Texas stands at $271,172. Like other real estate markets across the country, the State saw historic price appreciation with Zillow reporting a year-over-year increase of 20.9%.
The main cause for this is the shortage in the housing supply amid strong demand among newcomers to the State. You can look at the most expensive home sales in TX for a better look at this situation. This situation is expected to ease up as 2022 comes around as the housing inventory improves. Even so, this is significantly lower compared to real estate prices in New York and California over the past year. Check out the graph below:
Image from Zillow.com
Despite current price appreciation, Texas has still maintained its reputation for being one of the most affordable states for homeownership. Housing costs along with living expenses are lower compared to the national average which stands at about $293,349 according to Zillow. It is due to this that the real estate market in Texas has become a haven for retirees, business owners, and young adults looking to move in.
Texas attributes its impressive affordability to the ample amount of buildable land. This makes the State a top option for residential, commercial, and industrial developers. In addition, the State also performs well in the national cost of living index. Moreover, it’s easy to transition to a new home. You only need to look for companies who say, “We buy houses Texas” and get a good offer on your home.
The Texas rental sector also has a strong showing. At least 38% of Texans are renters and the demand is expected to grow as more people come in. However, rent prices are climbing in Texas cities like the Dallas-Fort Worth area and Austin. According to The Texas Standard, the average renter in Austin pays at least $1511 a month.
When it comes to property tax rates, however, Texas has one of the country’s highest at 1.81%. It’s because of this that Balance.com listed the State as one of the worst states for property taxes.
Nonetheless, the cost of living in Texas is still lower than the U.S. average. Plus, it is one of few states that do not collect a state income tax. Whether you are owning a home in Corpus Christi or renting a one-bedroom apartment in San Antonio, you will be able to save more than when you are living in California or New York.
Costs of Living in Texas
If you are looking to pay less in living expenses, then the Lone Star State is the place to be. According to BestPlaces.net, Texas has a cost of living score of 93.9 (A number lower than 100 indicates higher affordability than the national average). By comparison, New York and California have a score of 120.5 and 149.9, respectively.
There’s no question whether or not the State is an expensive place to live in. If we are going to break down the average cost of living in Texas, we can find that it does outpace other states in terms of affordability.
Let’s take a look at HomeCity.com’s analysis of how much it would cost to secure life necessities in the State:
Bills and Utility Costs
On average, Texans pay about $2,043.52 a year on utility bills. This is slightly lower than the national average of around $2,060 but significantly lower than California’s rate of $2,109.44.
Although slightly higher than the U.S. average, Texas’s transportation costs are more affordable compared to New York and California where commuting can cost more than 30%. The State is looking to improve this score by improving its public transportation system to support its growing population.
Housing Prices in Texas
When it comes to real estate prices, Texas is hands down one of the most affordable places to be in. It will cost you 15.7% less to own a home in the State while it will cost more than double the average if you purchase a home in California. Texans are confident about selling a house without a realtor for this reason.
Food and Shopping
Food and lifestyle expenses in Texas are lower. At least $892 a month for food is enough for a Texan family to live by, but this will depend on which city you are in. In Austin which has the lowest sales tax rate in the State, you could pay 11% less than the national average on groceries.
Health and Medical Costs
For healthcare, Californians pay 3% less on healthcare than Texans. However, according to HealthCareMarkets.com, an average insurance premium costs $16 less than the national average.
All in all, we can say that affordability is the highlight of moving to Texas. If you are looking to accomplish your real estate goals this 2022, you might as well make the Lone Star State your top choice.
Average Cost of Living in Texas
What is the average cost of living in Texas? How will it impact your quality of life as someone who has just moved in from costlier areas?
It all depends on your lifestyle and current needs. If you are living as a single individual, you might need to earn at least $2,636 to live comfortably each month. On the other hand, you will need to have a monthly income of around $4,594 if you are the sole earner for a family of four.
Another factor is location. Not all Texas cities are the same in terms of costs, so it’s important to do your homework on which cities are ideal for your needs. In case you can catch up with your monthly expenses and you want to move to a smaller home, then you can look for cash home buyers Houston and Dallas’s homeowners rely on for quick transactions.
Make Your Move to the Lone Star State
Have you been convinced about moving to Texas in 2022? You may want to start shopping for a home in an ideal neighborhood before real estate prices get any higher.