To Relocate Or Not

In recent years, a growing number of Americans have been leaving high-cost states like California in favor of lower-cost destinations such as Texas or Ohio. While the motives behind this shift vary, the common factors include affordability, housing costs, tax differences, and lifestyle adjustments. This article will explore the key differences between relocating from California to Texas or Ohio, outlining both the financial and social impacts of such a move.

1. Cost of Housing

One of the most striking differences between California and lower-cost states like Texas or Ohio is housing affordability. California, particularly its major cities like San Francisco, Los Angeles, and San Diego, consistently ranks among the most expensive housing markets in the U.S. According to Zillow, the median home price in California was approximately $740,000 in 2023. Renting is also prohibitively expensive, with median rent prices reaching $3,000 or more in many urban centers.

In contrast:

• Texas: Texas cities such as Austin, Dallas, and Houston have experienced rising housing prices due to population growth, but they remain significantly lower than in California. The median home price in Texas is about $330,000. Even in desirable metropolitan areas like Austin, homes tend to be far more affordable than their California equivalents.

• Ohio: Ohio offers even greater affordability. Cities such as Columbus, Cleveland, and Cincinnati have median home prices of around $250,000, making it an attractive option for those looking to save on housing costs. Rent prices also remain reasonable, often hovering below $1,500 per month in most urban areas.

2. Taxes and Economic Incentives

Taxes are another important consideration for those moving from a high-cost area like California to a lower-cost one.

• California: California has one of the highest tax rates in the country, including a top marginal income tax rate of 13.3%, which heavily affects high earners. In addition, California’s property taxes are moderate, but the high property values result in large tax bills.

• Texas: Texas is a popular relocation destination partly because it has no state income tax. This can be a huge financial boon, particularly for high earners. However, Texas compensates for this with higher property taxes. The state’s average property tax rate is 1.80%, which, combined with rising home values, can result in a significant tax burden, especially in urban areas.

• Ohio: Ohio offers a more balanced tax structure. While it does have state income taxes, the top rate is 3.99%, significantly lower than California’s. Ohio’s property taxes are also moderate, with an average rate of 1.56%, making it more manageable than Texas in this regard.

3. Cost of Living Adjustments (COLA)

Beyond housing and taxes, other living costs such as groceries, utilities, and transportation can vary widely between California and states like Texas or Ohio.

• California: California’s overall cost of living is among the highest in the nation, driven by high energy prices, gasoline costs, and higher-than-average costs for basic services. Everything from dining out to entertainment tends to be pricier compared to most other states.

• Texas: Texas offers a more moderate cost of living, although cities like Austin are seeing increases as they grow more popular. Utilities and gasoline tend to be cheaper than in California, and the absence of an income tax helps offset some of the rising costs.

• Ohio: Ohio boasts one of the lowest overall costs of living in the U.S. Groceries, utilities, transportation, and healthcare are all more affordable than in California, and even Texas. Ohio’s more affordable cost structure makes it attractive to people looking to stretch their dollar further while maintaining a good quality of life.

4. Job Market and Economic Opportunities

While relocating to a lower-cost state often means saving money, it’s important to consider the availability and quality of jobs, as this can have a major impact on your overall financial stability.

• California: California’s economy is diverse and robust, driven by industries such as technology, entertainment, agriculture, and tourism. Silicon Valley, Hollywood, and major agricultural centers create significant job opportunities. However, many high-paying jobs in these sectors are concentrated in high-cost areas, making it necessary to maintain a high income to keep up with living expenses.

• Texas: Texas has become a major economic hub, particularly for industries like tech (Austin), energy (Houston), and finance (Dallas). The state is business-friendly, with fewer regulations and lower operational costs for companies, making it attractive to entrepreneurs and corporations alike. The job market in Texas is expanding rapidly, particularly in areas like healthcare, education, and technology, offering plenty of opportunities for newcomers.

• Ohio: Ohio’s job market may not be as flashy as California’s or Texas’, but it offers solid opportunities in industries like manufacturing, healthcare, and education. Columbus has developed a growing tech sector, and Cleveland and Cincinnati are hubs for healthcare and finance. The cost of doing business is lower, so the job market is more accessible to people with a broad range of skills, even outside of the major industries.

5. Quality of Life and Lifestyle Differences

When moving from California to Texas or Ohio, there are also differences in culture and lifestyle that impact overall quality of life.

• California: Known for its laid-back, beach-centric culture in the south and its innovative, tech-driven culture in the north, California offers a wide range of lifestyles. It also has stunning natural beauty, with access to mountains, deserts, and coastlines, making outdoor activities a central part of the lifestyle. However, the high cost of living often means that residents must work harder to maintain a comfortable lifestyle.

• Texas: Texas offers a blend of Southern hospitality and a strong sense of independence. Cities like Austin are known for their cultural and musical scenes, while Dallas and Houston have a more fast-paced, corporate vibe. Outdoor activities are abundant, and the state has wide-open spaces for those who prefer a more rural or suburban lifestyle. The cost of living is lower, so residents may find they can afford a higher quality of life than in California.

• Ohio: Ohio provides a slower pace of life with a focus on community and family-oriented activities. The state’s natural attractions, like Lake Erie and the Appalachian Mountains, offer ample opportunities for outdoor recreation. Ohio residents generally enjoy a relaxed lifestyle without the high pressure of keeping up with exorbitant costs, allowing for more leisure and a better work-life balance.

Now, let’s be more specific regarding jobs:

If a techie has a job paying $100K in California, would that techie be able to find a comparatively paying job in TX or OH?

The answer is “Yes”, a tech professional earning $100K in California can potentially find a similarly paying job in Texas or Ohio, though the availability and exact salary ranges will depend on a few factors, such as the tech hub in question, the specific role, and the company’s scale.

Relocating could mean getting more value out of a similar or even slightly lower salary.

Texas Tech Job Market

Texas, particularly in cities like Austin, Dallas, and Houston, has developed into a significant tech hub over the past decade. Major tech companies like Apple, Google, Tesla, Oracle, and Dell have expanded their operations in the state, particularly in Austin. Because of this boom, the tech industry in Texas offers competitive salaries, with some roles comparable to those in California.

For instance:

• Austin: Known as “Silicon Hills,” Austin is Texas’ tech powerhouse. A software engineer or developer in Austin can expect to earn between $90K to $130K annually, with some specialized roles (such as data scientists or cloud engineers) earning even more. This means that a techie moving from California with a $100K salary would likely find a job with similar pay.

• Dallas: The Dallas-Fort Worth metroplex is another tech hub, with significant presence from companies like AT&T, Texas Instruments, and several financial tech companies. Salaries here range similarly, with $90K to $120K being common for mid-level tech professionals. However, housing and the cost of living are still lower than in California, making the salary stretch further.

• Houston: While traditionally focused on the energy sector, Houston is also seeing growth in tech jobs, especially in tech roles related to energy and healthcare. Tech professionals in Houston can expect salaries ranging from $85K to $110K for mid-level roles.

Ohio Tech Job Market

Ohio, while not as widely recognized as Texas for its tech industry, has been growing its tech sector, particularly in Columbus, Cincinnati, and Cleveland. Ohio offers lower-cost living, and while salaries might be somewhat lower than in Texas or California, they can still provide a high quality of life because of the affordability.

• Columbus: Columbus has emerged as a growing tech hub, particularly in areas like cloud computing, cybersecurity, and fintech. Companies like IBM, JPMorgan Chase, and Cardinal Health have strong tech presences here. The average salary for tech professionals is typically between $80K to $110K, meaning that while some roles may pay slightly less than $100K, the cost of living is much lower, making it a net financial gain.

• Cincinnati and Cleveland: Both of these cities are also attracting tech companies, particularly those in healthcare IT and manufacturing technology. Salaries range from $75K to $105K depending on the position. While this might sound lower compared to California, the overall lower cost of living in these cities means that $80K-$90K can go much further than $100K in California.

Cost of Living Adjustments

It’s important to note that while a tech professional in Texas or Ohio may earn a similar (or slightly lower) salary than in California, the cost of living in both states is significantly lower. For example:

• Housing: Median home prices in Texas or Ohio are significantly lower than in California, allowing a tech professional to afford a better standard of living (larger home, better amenities) for a fraction of the price.

• Taxes: Texas, with no state income tax, offers a major advantage, particularly for high earners. Ohio has lower state income taxes compared to California, which also results in higher take-home pay.

Ultimately in Texas, a tech professional can reasonably expect to find a job that pays $100K or more, with strong opportunities in cities like Austin and Dallas. In Ohio, salaries might hover slightly lower than $100K in some cases, but the lower cost of living offsets this, making the move financially advantageous overall. Whether in Texas or Ohio, a techie leaving California could maintain or even improve their financial position while benefiting from a more affordable lifestyle.

It’s definitely surprising to see how competitive salaries can be in places like Texas and Ohio, especially as their tech industries continue to grow. While California has long been a tech mecca, these other states are rapidly catching up, offering great opportunities without the high cost of living. Relocating could mean getting more value out of a similar or even slightly lower salary.

In conclusion, relocating from California to Texas or Ohio can provide significant financial relief, especially in terms of housing, taxes, and overall cost of living. However, each state offers a different experience. Texas provides a middle ground with more job opportunities, particularly in growing sectors like tech and energy, while Ohio offers a slower, more affordable lifestyle with moderate economic growth. Ultimately, the decision to relocate comes down to individual preferences, whether they prioritize career opportunities, lifestyle, or affordability.