Posted on 10/05/2018 7:31:10 AM PDT by SeekAndFind
There are plenty of reasons for Texas’s population boom over the past several years—the economy, immigration, Whataburger—but one that can’t be overlooked is the fact that you typically can find some space to stretch out. And thanks to a chart from real estate site Property Shark, we can see exactly how much square footage you can get in Texas, compared to the rest of the country, for $200,000.
The chart shows how much average square footage you get from a $200,000 investment in 33 U.S. cities, including the six largest in Texas—Houston, San Antonio, Dallas, Austin, Fort Worth, and El Paso. And the numbers across the state look pretty good.
Let’s start by just recapping what the study found for each city:
The order of that list, from most to least amount of square footage for your money, won’t surprise anyone who follows real estate in Texas. Austin, which has a limited supply of homes but is flooded with people, is the most expensive city. El Paso and San Antonio, where that relationship tends to be flipped, are among not just the most affordable cities in Texas, but in the entire country. Houston, Dallas, and Fort Worth split the difference, finding themselves in the middle of the pack both in Texas and the U.S.
Looking at the numbers in the context of the rest of the country, though, helps explain the boom that we’ve seen throughout the state. Austin’s average of 1,341-square feet per $200,000 makes the city seem expensive and overpriced to people in parts of the state where your money goes a lot further. But it’s a downright bargain compared to cities in the northeast and the West Coast. When Austinites take the leap from renting to buying, they might notice that properties they’re interested in are swarmed with bids from California, often for more than the asking price. Why? Because 1,341-square feet is an impossible, luxurious dream to people out there. $200,000 in San Francisco gets you a measly 260-square feet, and the numbers don’t get much better throughout the rest of the state’s coast: San Jose will give you 376-square feet, San Diego 496-square feet, Los Angeles 501-square feet. If property is three to four times as expensive where you’re from, then even Austin’s relatively high property values seem like a stone-cold bargain by comparison. (Let’s not even get started on Manhattan, where $200,000 will get you 126-square feet, commonly known in Texas as a small closet.)
Extrapolating further from this data, it seems that cities where $200,000 you fetch between 1,1100–2,100-square feet are the ones experiencing the greatest population booms: According to Census data released in March, Dallas, Houston, Atlanta, and Phoenix are the metro areas with the largest gains between 2016-2017 (Orlando and Austin came in at number eight and number nine, respectively). Seattle (where you get 525-square feet for your money) and Washington, D.C. (where it’s 423-square feet) were the only cities in the top ten that offered fewer than 1,100-square feet for $200,000. (Pricing date for the other two metro areas, Tampa and the inland California city of Riverside, wasn’t available.) Other fast-growing metro areas like Charlotte, Las Vegas, and Nashville similarly fall within the same price window.
| 2017 Rank | 2016 Rank | Metropolitan Area | 2017 Population | 2016 Population | Numeric Change |
|---|---|---|---|---|---|
| 1 | 1 | Dallas-Fort Worth-Arlington, Texas | 7,399,662 | 7,253,424 | 146,238 |
| 2 | 2 | Houston-The Woodlands-Sugar Land, Texas | 6,892,427 | 6,798,010 | 94,417 |
| 3 | 3 | Atlanta-Sandy Springs-Roswell, Georgia | 5,884,736 | 5,795,723 | 89,013 |
| 4 | 4 | Phoenix-Mesa-Scottsdale, Arizona | 4,737,270 | 4,648,498 | 88,772 |
| 5 | 11 | Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia | 6,216,589 | 6,150,681 | 65,908 |
| 6 | 6 | Seattle-Tacoma-Bellevue, Washington | 3,867,046 | 3,802,660 | 64,386 |
| 7 | 13 | Riverside-San Bernardino-Ontario, California | 4,580,670 | 4,523,653 | 57,017 |
| 8 | 8 | Orlando-Kissimmee-Sanford, Florida | 2,509,831 | 2,453,333 | 56,498 |
| 9 | 9 | Austin-Round Rock, Texas | 2,115,827 | 2,060,558 | 55,269 |
| 10 | 7 | Tampa-St. Petersburg-Clearwater, Florida | 3,091,399 | 3,036,525 | 54,874 |
Low real estate prices don’t necessarily mean that a city is growing or shrinking, though. Cleveland, which gives property owners the most bang for their buck (3,769-square feet) has shrunk every year this decade. San Antonio, which places third on the list, boasted a growth of nearly 25,000 people over a twelve-month period between 2016 and 2017. El Paso, which places second, grew by only 2,780 people in that year. The sweet spot may be somewhere in the middle, in other words, but there’s not as much to learn by looking at the margins.
My daughter just bought 2500 square feet in a very low crime, upper middle class suburb of Fort Worth. $250,000. She and her husband are a bit green though. They probably could have gotten it for a few thousand less,..though it is in a highly desirable location, so maybe not.
My daughter’s taxes are $4,000/year. Her sister’s, in a great suburb northwest of Chicago are $8,000. Of course, that was BEFORE she bought it. They’ll probably go up half again as much, now.
Well, now that she’s got half a million in go fund me, she can afford to build 2 MORE front doors, can’t she?
COMMENT I POSTED AT TEXAS STATE MONTHLY
Fascinating article. I am a California appraiser who is very familiar with Texas property values and tax rates. May I suggest there is an intervening variable or factor between house size and value per $200,000 priced home. That is property tax rates. This is called Tax Capitalization, which means the higher the property tax rate, the lower the property’s expected market value; and conversely the lower the property tax rate, the higher the expected market value.
California has a typical 1% base property tax rate; Texas has a 2% base rate (plus special district assessments). So the same priced home in a similar neighborhood as in California would sell for less; and vice versa, a similar size home in California home would sell for higher.
Below I have used the online property tax calculator from SmartAsset.com to find the property tax rate and actual-estimated annual property tax in large cities in Texas and California.
El Paso and San Antonio have the lowest property tax rate per $200,000 home and this translates into larger homes (3,334 and 3,249 sq. ft.) than in Fort Worth, Houston, Dallas and Austin (2,199, 2,093 and 1,824 and 1,341 sq. ft. accordingly).
There is no data shown at the SmartAsset.com website for tax rate per home size for California. So I used the Zillow.com website to take a sample of $200,000 priced homes in San Francisco, San Jose, Los Angeles and San Diego, to estimate how much floor space $200,000 can buy. There were only 3 homes in San Francisco that sold for $200,000 (although estimated value was $1 to $2 million). There were only 19 homes that sold for $200,000 in San Jose. In Los Angeles and San Diego i calculated the average home size for a $200,000 home from a sample of 50 home sales in each city.
Oddly, the average home sizes for a $200,000 hoe in San Francisco (1,633 sq. ft.) and San Jose (1,526 sq. ft.) were higher than $200,000 homes in LA (1,184 sq. ft.) and San Diego (933 sq. ft.). This can only be explained because San Francisco and San Jose have lower property tax rates ($0.84 to $1.04 per sf) than LA ($1.34) and San Diego ($1.67 per sq. ft).
So tax capitalization (the conversion of higher or lower property taxes into a higher or lower value) does influence the size of home that one can purchase both when comparing homes inside Texas and California and comparing Texas with California.
By the way, El Paso and San Antonio have the lower property taxes per sq. ft. of house size and thus the larger home size for $200,000 priced homes.
TEXAS (Arrayed from lowest to highest property tax per sq. ft. for $200,000 home)
El Paso – Travis County 1.973% $3,946 (3,334 sq.ft.) Tax: $1.18 per sq. ft.
San Antonio – Bexar County 2.097% $4,194 (3,249 sq. ft.) tax: $1.29 per sq. ft.
Fort Worth – Tarrant County 2.321% - $4,642 (2,199 sq. ft.) Tax: $2.11 per sq. ft.
Houston – Harris County 2.259% $4,518 (2,093 sq. ft.) Tax: $2.16 per sq. ft.
Dallas – Dallas County 2.173% $4,346 (1,824 sq. ft.) Tax: $2.38 per sq. ft.
Austin – Travis County 1.973% $3,946 (1,341 sq. ft.) Tax: $2.94 per sq. ft.
CALIFORNIA – Arrayed from lowest to highest property tax per sq. ft. for $200,000 home)
San Francisco - SF County – 0.683% $1,366 (260 sq. ft.) (1,633 sq. ft. avg. 412 sf std. dev. 3 home sample) Tax: $0.84 per sq. ft.
San Jose – Santa Clara Co. – 0.794% $1,588 (376 sq.ft.) (1,526 sq. ft. avg. 350 sf std. dev., 19 home sample) Tax: $1.04 per sq. ft.
Los Angeles – LA County 0.793% $1,586 (501 sq.ft.) (1,184 sq. ft. avg. 735 sf std. dev. 50 home sample) Tax: $1.34 per sq. ft.
San Diego – SD County – 0.781% $1,562 (496 sq.ft.) (933. sq. ft. avg. 373 sf std. dev. 50 home sample) Tax: $1.67 per sq. ft.
Data Source: https://smartasset.com/taxe...
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