Is the California Exodus Real?

Is the California Exodus Real?

Why Dallas, San Antonio, and Jackson Hole Appeal to Californians

 By Michael Repka

In our previous two issues of The DeLeon Insight, we looked at the myriad of reasons as to why people are leaving California, along with the pandemic’s impact on migration, and why Californians are moving to cities in Nevada, Arizona, New Mexico, and Texas. In this issue, we take a look at three more cities – Dallas, San Antonio, and Jackson Hole – that have attracted many Californians looking for a fresh start. My wife and I have had the pleasure of meeting with top real estate agents in all of these cities recently, and the appeal of these destinations for the soon-to-be ex-Californians is quite easy to understand.

Why are Californians Moving to Dallas?

As we discussed in the last issue, Texas has been the top state for Californian migration since 2017.1 Aside from the tax benefits, Texas’ key industries (e.g., biotechnology and life sciences, energy, information technology, and advanced manufacturing)2, cheaper cost of living (93.9 versus 149.9 with 100 representing the national average)3, and lower real estate prices (averaging $275,000 for a single-family home versus $758,990 in California)4 appeal to many Silicon Valley companies and their employees. 

In the Dallas area, the top industries include technology, defense, financial services, healthcare, and transportation.5 Companies with headquarters in Dallas include AT&T, ExxonMobil, Southwest Airlines, and Fossil. Dallas is ranked second by Forbes Magazine on its list of the “Best Places for Business and Careers” due to the ease and affordability the city provides to business owners to get their businesses up and running.6

With a population of over 1.3 million, Dallas is a city with skyscrapers, shopping malls, and an active downtown filled with restaurants and nightlife. Food of all types, particularly barbeque, Tex-Mex, and Mexican can be found on almost every corner and will satisfy even the pickiest foodie’s requirements. Additionally, hundreds of food trucks can be seen buzzing around the city. Truth be told, my wife and I had one of the best Mexican meals and mixed drinks in Dallas. 

Dallas has a vibrant arts and culture scene, from the Dallas Arts District (where several museums offer free admission) and galleries in the Bishop Arts District, to street art in Deep Ellum, and performances and concerts in downtown. Basketball fans can enjoy watching the Dallas Mavericks, while the NFL’s Dallas Cowboys and their spectacular home stadium are a mere 30 minutes away in Arlington. Outdoor enthusiasts can find nearly 400 parks on over 20,000 acres of parkland nearby, with 158 miles of trails winding through parks and connecting the communities for hikers and bikers.

Politically Dallas leans left, unlike much of Texas, with Dallas County voting 65.1% for the Democratic Party candidate in 2020.7  

Like Austin, Dallas has seen an increase in its housing market. In the third quarter of 2021, the median price of residential homes in the Dallas-Fort Worth-Arlington metro was $354,900, up 18.3% year-over-year.8 Total active listings declined by 28% year-over-year, while the number of days on the market decreased to 20 days.9 A few of the area’s top agents confirmed to us that housing prices have seen a big jump and that inventory is quite low in 2021.

As an example, for a little under $600,000, you can get a home with 3 bedrooms, 4 baths, and 2,260 square feet
of living space near a golf club, and just minutes from downtown, Trinity Groves, and Bishop Arts.

For those looking for luxurious estates with excellent schools, Highland Park and University Park (dubbed “Park Cities”) are amongst Dallas’ most desirable neighborhoods to reside. Properties in Park Cities range from upscale high-rises to mansions, set amongst manicured lawns and tree-lined streets, with shopping, dining, and entertainment in downtown Dallas a few minutes away. Park Cities’ children attend Highland Park Independent School District, which is considered Texas’ best public school system.11 

As an example, for $5.5 million, you can get a Jacobean Manor with 4 bedrooms, 7 bathrooms, and 7,297 square
feet of living space in University Park.

The five and six million dollars homes in Park Cities are just the mid-range. There are many homes in the area that are above $15 million, and some as high as $37 million.

The Allure of San Antonio

Just over 270 miles southwest of Dallas is San Antonio, a city that reminds me of Santa Fe on a much larger scale. San Antonio is rich in history with vibrant culture and eclectic cuisines. Interspersed throughout the city are historical landmarks such as the Alamo, Mission San Jose, Mission Trail, Mission Concepción, Mission Espada, and San Fernando Cathedral, just to name a few.

Of course, one cannot go to San Antonio without visiting the River Walk, the #1 attraction in Texas. The River Walk is a 15-mile urban waterway, tucked below street level and traversing the heart of downtown. The river can be explored via foot or river barge on guided tours. Both sides of the river have restaurants, shops, hotels, and condos, with frequent foot bridges to transverse the gap. We personally experienced the energy and excitement of the area by staying at the Mokara Hotel, which overlooks the River Walk, and ate at various restaurants that line the river, while watching tourists and locals stroll by with shopping bags.

The political climate in Bexar County13 leans left, with 58.3% of voters choosing the Democrat Party candidate in 2020.14 In fact, Bexar County has voted Democratic in the four most recent Presidential elections.15

Real estate in San Antonio is much more affordable than in Silicon Valley, with the median home price in the third quarter of 2021 being $295,000, up 15.7% year-over-year.16 The active listings in that quarter were down 14.7%, while days on the market were about 26 days, less than in Q3 2020. 

As an example, for a little under $700,000, you can get a newly constructed home with 4 bedrooms,
4 bathrooms, and 2,895 square feet of living space.

For those looking for more luxurious estates, $6.9 million can get you 5 bedrooms, 7 bathrooms, and 10,060 square feet of living space on almost an acre of land.

Jackson Hole – Luxury, Sanctuary, and an Incredible Setting

Although Wyoming is not among the top tier states to which Californians have migrated, for the ultra-wealthy it does hold much allure. In fact, there were over 7,100 Californians who had moved to Wyoming between 2017 and 2019.19  Last year, we took a trip to Jackson Hole to visit our former clients who had moved there from Los Altos Hills. We have also spoken with many of the top local real estate agents in the area about the market, the impact of COVID-19, and the city’s neighborhoods.

As we flew into the Jackson Hole Airport, we were astonished by the enchanting views of the snow-capped Teton Mountain Range with lush, grassy plains nestled in the valleys between the peaks. Along the drive from the airport to our hotel in Teton Village, we soaked in the alpine scenery teeming with lush green vegetation and towering canopies of trees, all set against the backdrop of a deep blue sky. Wildlife, such as bison, moose, and elk, could be seen grazing on the banks of the Snake River, which meanders through the valleys. 

Jackson Hole Town Square, a 20-minute drive from Jackson Hole Airport, is a vibrant town with a quaint, western feel. Officers on horseback, decked out in cowboy boots and hats, direct traffic and pedestrians along the streets. Stagecoach rides tour the historic downtown as people leisurely stroll in and out of shops that offer a number of different items, from boots and real furs (you’re not in California anymore) to Native American jewelry and artifacts. Rodeo events, including calf roping, bull riding, saddle bronc riding, bareback bronc riding, and barrel racing, all take place in the summer months. And to truly immerse visitors in the culture of the Old West, a Town Square shootout is reenacted Monday through Saturday evenings between Memorial and Labor Day. 

Jackson Hole, considered one of the top ski destinations in the country, is filled with skiers who come to experience the vertical rise and rugged terrain during the winter months. 

With such appealing draws, it is no wonder that tourism and small businesses play important roles in Jackson Hole’s economy. Looking at Wyoming as a whole, its key industries include agra-tech and food products, data centers and IT, firearms manufacturing, wind energy, and outdoor recreation.20 

The political climate in Wyoming is firmly right, as 70.4% of voters voted for the Republican Party in 2020.21 Contrarily, Teton County22 leans left, with 67.8% voting Democrat in the last election.23

Wyoming offers much more attractive tax benefits to its businesses and residents than California. In fact, Wyoming is generally considered the most taxpayer-friendly of all 50 states – it does not have corporate taxes, taxes on intangible assets, personal income taxes, inheritance or estate taxes.24 Residential property tax in Teton County is also quite low, and is derived from taking the assessed value and applying the mill levy rate.25 For example, for a house appraised at $500,000, the estimated property tax would be around $2,733.82. 

The cost of living in Wyoming is around 27% lower than in California.26 Gasoline in Wyoming is also cheaper, around $3.38 per gallon, versus $4.68 in California (as of 12/13/2021).27 A 1-bedroom apartment in the downtown area costs about $840 per month in Wyoming, while the same space in California would rent for $1,859 per month.28

On the whole, real estate in Wyoming is more affordable than in California. A typical home in Wyoming is around $290,304 (as of 12/1/2021)29, whereas a typical home in California is around $722,406 (as of 12/1/2021).30

In Teton County, however, real estate can be quite expensive. In November 2021, the average sale price for a single-family home in this sought after county was $7,042,925, while the median sale price was $3,450,000 with an average days on market of around 112.31 Similarly, Teton County condo/townhouses had an average sale price of $1,812,375, and a median sale price of $1,350,000 with an average of 88 days on the market.32

Interestingly, unlike Silicon Valley where most homes are on the MLS and the sale prices are published on the internet, over 31% of homes in Teton County are not on the MLS, and the sale prices are not published. Although I was told this was to protect the homeowners’ privacy, naturally there are potential conflicts of interests that could play into listing agents recommending this approach to potential sellers (e.g. increased likelihood of getting both sides of the commission; reduced marketing expense; and a faster receipt of the commission). On the other hand, buyers with a well-connected agent may benefit substantially from purchasing one of these “off-market” properties that sell for less money due to reduced competition.

As an example, for around $3.6 million, you can get a newly constructed home with 3 bedrooms,
3 bathrooms, and 2,806 square feet on a half-acre lot.

For those looking for coveted luxury estates, Teton County has homes that are well over $20 million. 

8 (2021 Q4 data had not been released as of the writing of this article.)
9 Id.
13 San Antonio belongs in Bexar County.
22 Jackson Hole is in Teton County.
32 Id.