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re: Why are housing costs so much lower in Texas than Louisiana
Posted on 5/15/17 at 10:13 am to eyepooted
Posted on 5/15/17 at 10:13 am to eyepooted
Prices are rising in the Houston area over the last year. There was a nice dip in the price of houses in the +400K range early last year, but they have come up significantly since then.
I moved early last year and picked up a place that had been completely remodeled in Northlake Village of Cinco Ranch for about $105/sq ft. Right now the cheapest house in my neighborhood is going for $128/sq ft and needs to be been remodeled, and most are $135-150 if they have been remodeled.
I moved early last year and picked up a place that had been completely remodeled in Northlake Village of Cinco Ranch for about $105/sq ft. Right now the cheapest house in my neighborhood is going for $128/sq ft and needs to be been remodeled, and most are $135-150 if they have been remodeled.
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Posted on 5/15/17 at 10:15 am to eyepooted
The reasons have all been stated but heres a summary.
Property Taxes - TX property taxes are ridiculous compared to LA. LA actually has the lowest property taxes of any State in the nation and its not even close. I think Alabama is next. The people saying that TX property taxes wash out against LA income taxes are mostly wrong. Its really a matter of perspective and it changes big time as you grow older. I have a story below for comparison.
Cheap Labor - TX generally has cheaper labor costs because they have more low-wage, low-skill, immigrant job-market competition.
Easy Land Development - TX's size, geography and climate means that the land is cheaper and easier to develop. TX doesnt have to contend with as many bodies of water limiting urban expansion. TX doesnt have to deal with as many swampy, low-lying, flood plain areas. TX doesnt have as many rain-outs throughout the year causing construction delays. TX doesnt have the underbrush and vegetative growth that LA has(due to the rainfall difference) which makes clearing land a much more costly endeavor. Mostly open spaces in TX means you can pretty much point in a direction and start building.
Equity - All of the above means that TX is a developers paradise with new construction popping up all the time. This holds equity down so a house in TX has a worse ROI than LA, generally.
The Property Taxes Story:
I had a friend that lived in Pflugerville, TX in a newly constructed, middle-class neighborhood. He bought his house for $160K. His State income tax was $0 but his property tax bill was $4,620! His income was around $40-$50k.
Now my wife on the other hand, the most she ever paid in State income taxes in LA was $4000. This was in a year that she made $80K with no deductions/write-offs. She bought her house for $75K and renovated it putting in another $65K. Total = $140K.
Her property tax bill? $75. Thats right, $75.
So my wife is ahead of my TX friend by $545/year and
with almost twice the taxable income. If she made what he made the difference would be even more.
The other thing to consider is that you wont always have an income so not paying State income tax is only useful to you until you retire. But you will ALWAYS have to pay property taxes. You could also work under the table if you really wanted to dodge State income tax but theres no tricking the property tax assessor system. To the extreme end, living off the land or homesteading means you wont have to make as much money to keep up your lifestyle but there is no DIY fix to property taxes. Unless you live in a tent.
Property Taxes - TX property taxes are ridiculous compared to LA. LA actually has the lowest property taxes of any State in the nation and its not even close. I think Alabama is next. The people saying that TX property taxes wash out against LA income taxes are mostly wrong. Its really a matter of perspective and it changes big time as you grow older. I have a story below for comparison.
Cheap Labor - TX generally has cheaper labor costs because they have more low-wage, low-skill, immigrant job-market competition.
Easy Land Development - TX's size, geography and climate means that the land is cheaper and easier to develop. TX doesnt have to contend with as many bodies of water limiting urban expansion. TX doesnt have to deal with as many swampy, low-lying, flood plain areas. TX doesnt have as many rain-outs throughout the year causing construction delays. TX doesnt have the underbrush and vegetative growth that LA has(due to the rainfall difference) which makes clearing land a much more costly endeavor. Mostly open spaces in TX means you can pretty much point in a direction and start building.
Equity - All of the above means that TX is a developers paradise with new construction popping up all the time. This holds equity down so a house in TX has a worse ROI than LA, generally.
The Property Taxes Story:
I had a friend that lived in Pflugerville, TX in a newly constructed, middle-class neighborhood. He bought his house for $160K. His State income tax was $0 but his property tax bill was $4,620! His income was around $40-$50k.
Now my wife on the other hand, the most she ever paid in State income taxes in LA was $4000. This was in a year that she made $80K with no deductions/write-offs. She bought her house for $75K and renovated it putting in another $65K. Total = $140K.
Her property tax bill? $75. Thats right, $75.
So my wife is ahead of my TX friend by $545/year and
with almost twice the taxable income. If she made what he made the difference would be even more.
The other thing to consider is that you wont always have an income so not paying State income tax is only useful to you until you retire. But you will ALWAYS have to pay property taxes. You could also work under the table if you really wanted to dodge State income tax but theres no tricking the property tax assessor system. To the extreme end, living off the land or homesteading means you wont have to make as much money to keep up your lifestyle but there is no DIY fix to property taxes. Unless you live in a tent.
This post was edited on 5/15/17 at 10:18 am
Posted on 5/15/17 at 10:17 am to Dire Wolf
quote:
the property taxes in Texas will give you heart burn
This is true, but having a public school system and roads that don't eat up a set of tires yearly is also pretty cool.
Posted on 5/15/17 at 10:19 am to 50_Tiger
quote:as I sit here in the edge of Memorial Park.......nitwit
Rouge we get it, you hate Texas.
This post was edited on 5/15/17 at 10:20 am
Posted on 5/15/17 at 10:20 am to eyepooted
Louisiana govt is more corrupt
Posted on 5/15/17 at 10:21 am to Rouge
Testy this morning aren't we?
Posted on 5/15/17 at 10:23 am to fjlee90
quote:
but having a public school system
Only matters if you have kids. Many people choose to never have kids, have grown kids that arent of school age anymore or are older and retired.
Then there are those that choose to put their kids in private school regardless of the quality of public schools.
Then there are those that choose to homeschool.
quote:
...and roads that don't eat up a set of tires yearly is also pretty cool.
Amen to that shite.
I will say this though. Thats a uniquely NOLA problem. Jefferson Parish has a similar population size and is built on the exact same backswamp and the roads are WAY better than NOLA and really arent any worse than TX.
This post was edited on 5/15/17 at 10:24 am
Posted on 5/15/17 at 10:34 am to nola000
quote:
Only matters if you have kids
Fair point. I don't have any kids that I am aware of, but since I'm such a bleeding heart liberal
, it's still money well spent in my book. quote:
Thats a uniquely NOLA problem.
I'm going to have to disagree with you my man. BR and it's surrounding burbs are pretty bad these days and there hasn't been much of a push to better the situation.
Posted on 5/15/17 at 10:38 am to 50_Tiger
You will love Richardson. Get in Pearce or Richardson high school district.
Great homes and they hold their value very well. You will pay but the sweet spot is 350-450k. Not sure of your budget
Great homes and they hold their value very well. You will pay but the sweet spot is 350-450k. Not sure of your budget
Posted on 5/15/17 at 10:38 am to wfallstiger
quote:What does Mississippi have to do with anything?
Cost of housing has always been stoopid in Louisiana....assume it has to do with landmass
Posted on 5/15/17 at 10:46 am to Cold Drink
quote:
What does Mississippi have to do with anything?
Mississippi, like Louisiana, always gets knocked down -- and it should -- but there are some very nice places in Mississippi -- more towards the northern part of the state -- that I could see myself living in.
Posted on 5/15/17 at 10:49 am to 50_Tiger
quote:
This is essentially what's stopping me from buying at this point.
I already pay in rent what I would pay in a mortgage. It's the property tax bill that makes me cringe.
You realize as a renter, the property owner has factored in real estate taxes into your rate? You're paying property taxes now-albeit on a lower appraised unit.
Depending on where you live, you're missing out on an equity building opportunity.
Posted on 5/15/17 at 10:51 am to JoBoo
quote:
You realize as a renter, the property owner has factored in real estate taxes into your rate? You're paying property taxes now-albeit on a lower appraised unit.
Depending on where you live, you're missing out on an equity building opportunity.
Yes. I am renting to amass 20% down. Because im looking at easily 5k in property taxes. So im trying to not have PMI attached to my loan. I am short about 10k out of the 60K I have a goal for.
Posted on 5/15/17 at 11:01 am to JoBoo
I rent and I am not looking to buy in Houston. I would have to move out of the loop to buy, which is not what I want to do. All the houses inside the loop are 400k and up. Add in property tax and I would have to have roommates for a long time.
I understand building equity in your home and it could become an asset but it seems more like a liability?
My salary isn't bad but saving 20% for a 400K+ house is going to take a while. I pay $1200 for a 1bdrm so I'm probably the stupid one.
My sister wanted me to buy a condo. I could get one for $125-150k right outside the loop but factor in $400-500/maintenance a month does not seem worth it.
I understand building equity in your home and it could become an asset but it seems more like a liability?
My salary isn't bad but saving 20% for a 400K+ house is going to take a while. I pay $1200 for a 1bdrm so I'm probably the stupid one.
My sister wanted me to buy a condo. I could get one for $125-150k right outside the loop but factor in $400-500/maintenance a month does not seem worth it.
This post was edited on 5/15/17 at 11:03 am
Posted on 5/15/17 at 11:10 am to eyepooted
It's not just Texas. In ATL you can get twice the size house for 2/3 the price.
Posted on 5/15/17 at 11:13 am to eyepooted
Despite flying over Collin and Denton counties and losing count of all the new homes going up... it still isn't keeping up with demand. One of the reasons is a shortage of construction labor.
DFW home prices have risen about 50% in the last 5 years.
Having said that, you can still get a decent price in a good school district. Older neighborhoods in Plano and Richardson for instance.
DFW home prices have risen about 50% in the last 5 years.
Having said that, you can still get a decent price in a good school district. Older neighborhoods in Plano and Richardson for instance.
Posted on 5/15/17 at 11:21 am to nola000
quote:
The other thing to consider is that you wont always have an income so not paying State income tax is only useful to you until you retire.
So you are saying that you don't pay income tax on your retirement withdrawals? When you retire, do you just plan on having buckets of cash stored away in your closet from over the years or something? Most people have their money tied up in some plan which will pay them out at much more than what they put in, or never paid income tax originally, so you will have income taxes.
Now, it may be worth downsizing in TX. I'll admit that. But I actually know some in LA who pay nearly the same in property tax as here. The rate is lower, but the home price is so high, that it comes out nearly the same. At least that's what they tell me (moved from the Woodlands back to LA. Will admit house in LA is a bit nicer, but not by a whole bunch)
Posted on 5/15/17 at 11:24 am to nola000
quote:
TX property taxes are ridiculous compared to LA
This is true, I will pay almost 14K in property taxes this year, but I have 2 kids in fantastic public schools, with a 3rd that will be in school soon. Based on our household income, I would be paying 13K in income taxes in LA. I could live in a smaller house and pay less in property taxes, but I have no options with income taxes.
Another factor you are leaving out is that I earn about 25% more in the Houston area than those doing the same work in Louisiana.
I haven't seen the Equity issue here either, I bought a house in Katy in 2008 for $175K and sold it early last year for $275K. I got a great deal on the home I bought last year, but I have seen it appreciate about 100K in the last year.
Don't forget that the sales tax is 2-3% higher in LA vs TX
Posted on 5/15/17 at 11:25 am to eyepooted
quote:
Why are housing costs so much lower in Texas than Louisiana
More development-appropriate land in Texas? More production home builders and more options with good public schools?
Posted on 5/15/17 at 11:26 am to eyepooted
The houses are cheap outside the texas metro areas if you decide to commute your life away (or you don't work near city core).
If you want to have a sub 45 minute commute in the afternoon, you are paying 250/ft min for small single family home. 350/ft for new or renovated Then you pay 2.4% property taxes. Houston was slightly lower price per ft but similar (safe areas manageable commute)
If you want to have a sub 45 minute commute in the afternoon, you are paying 250/ft min for small single family home. 350/ft for new or renovated Then you pay 2.4% property taxes. Houston was slightly lower price per ft but similar (safe areas manageable commute)
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