The Californization of the Texas Housing Market (WSJ)

[dalton99a]

https://www.wsj.com/economy/housing/texas-housing-california-migration-affordability-a50c78f
https://archive.ph/skBPu

The Californization of the Texas Housing Market
Migration from more expensive states has pushed home prices out of reach for many locals; ‘a very hard market for first-time buyers’
By Adolfo Flores
Oct. 10, 2023 9:00 pm ET

Texas has long had a reputation as an affordable place to live, in large part because homeownership stayed within reach for the middle class.

Now the state is being walloped by the same forces that have made homes a lot less affordable in many cities previously known for reasonable prices: pandemic-era migration from California and other more expensive areas.

California to Texas was the most popular interstate relocation route in the country in 2021, according to an analysis by storage-space search site StorageCafe using Census Bureau data. During that year, about 111,000 people — about 300 a day — moved from California to Texas.

Soaring prices have left many longtime residents grumbling about the Californization of Texas.

The Federal Reserve Bank of Dallas recently analyzed data on housing affordability in Texan cities, defined as the percentage of the housing stock affordable to families earning the median income in those places. At the beginning of 2014, nearly two-thirds of homes in San Antonio were affordable for a median-income family. By the end of 2022, fewer than one-third were. Affordability, defined as what a family spending 28% of its gross income on housing could buy, also declined in Dallas, Fort Worth and Austin, before ticking up slightly early this year.

...

[uponit7771]

1. Unaffordable housing is one of the reasons Japan economy went stagnant

[dalton99a]

2. Yep. Japan's data:

[onethatcares]

3. gee, I'm glad they didn't blame any hedge funds

I think Greystone might have a plot to keep those prices moving up in previously affordable areas.

[LeftInTX]

4. Yep!

[haele]

5. That happened in the Pacific Northwest in the late 70's....

We moved from California to Seattle in the late 60's, we could still find family sized rentals and homes for sale at reasonable prices through the mid-70's.
Then, one of the major California newspapers showcased "affordable retirement and investment property" - large farm and ranch plots, old homesteads, depressed areas of Seattle and Tacoma ready to be "gentrified".
Prices rose so quickly and housing costs got so bad within 5 years that locals started taking potshots at cars with California plates.
Lower income workforce - "affordable housing" never recovered.

Haele

[2naSalit]

6. Been going on...

In Montana for the last fifteen years. There's no way I could afford any housing without my gov't subsidy, period.

ETA: And as it is, I live in what could be considered one step up from trailer park.

[Johnny2X2X]

7. Multi faceted problem

People leaving CA are selling their homes and getting millions for them. So they go to TX with cash in hand and the ability to pay whatever it takes to win the bidding war. If you net $1M on the sale of your CA home, you're going to get much more home in TX for $600K, so you have no problem paying $700K to outbid anyone.

Air BnB is totally different now, corporations took over. Their business model means they can pay way over asking for site unseen homes in desirable locations.

Builders play a part too. They just don't build "starter" homes anymore because the profit is in the big mcMansions. I'd love to see more new housing developments where the focus is going to be on 1200 to 1500 square foot homes.

[ripcord]

8. It will probably hurt the water supply in the long run if they are from Southern California

Southern Californian's have a fascination with lush green lawns even in desert environments, it is very irresponsible but it is also widely held.

[inthewind21]

9. EVERY SINGLE

STATE IN THE UNION makes this claim. By now California should be damn near empty. Funny thing, it's not. How could that be!

[haele]

12. Because a lot of these are investment purchases instead of purchases for residence.

50 or 60 year old heirs who own their own house and are still working sell their parent's home buy property for cash in a cheaper red state and turn it into "an investment/retirement home so they don't pay capital gains.
These types of heirs used to do that here in California with the WWII/post War starter homes they grew up in, but those are getting fewer as the first wave of second buyers back in the 1980's and 1990's (after the first housing bubble/savings and loans collapse) tended to be developers that put apartments or McMansions in place of those little post-modern suburban bungalows and ranch houses that popped up in the 40's and 50's.

Haele

[treestar]

10. This is capitalism, supply and demand

Texas is so red they should be accepting of this action of the free market.

[pecosbob]

11. When combined with some of the lowest wages in the nation...

makes for some bad math.