But Then I’d Be Living in Texas

At some point this month, one of these has found you: an Instagram reel, a TikTok house tour, a Zillow link dropped in the group chat. The mansion outside Dallas with the pool and the media room. Six bedrooms, an acre, high ceilings with a chef’s kitchen all for the price of a Culver City fixer. The caption says some version of “and THIS is why I left LA,” and the comments wait for you to admit that California prices are insane… but you say the thing everyone says: “Sure, but then I’d be living in Texas.”

It sounds like a joke. It sounds, honestly, like you’re just trying to make yourself feel better about your mortgage. I want to make the case that “Sure, but then I’d be living in Texas” is the only accurate sentence in the conversation.

Start with a purchase that behaves normally. Porsche publishes a national MSRP for a new 911, whether the dealer is in Los Angeles, Chicago, or Houston. Economists call this the law of one price. If the exact same thing is cheaper somewhere else, people buy it there and resell it where it costs more. Eventually, the gap narrows. Which is why gold, iPhones, and the Porsche 911 cost roughly the same in all fifty states.

It most definitely does not hold for houses. This March, the median asking price in the Los Angeles metro was about $1.1 million. Dallas-Fort Worth: $420,000. Houston: $350,500. Same country. Same drywall. And nobody is trucking houses across state lines to close the gap, which tells you exactly where the extra money lives. Not in the structure. Construction costs more in California, but not three times more. Whatever LA buyers are paying for is stuck to the ground.

The video is comparing houses when it should be comparing location. There’s nothing mysterious about building another house. You need land, materials, labor and permits. Texas has room to build outward and uses it; relative to coastal California, its big metros have simply been able to keep adding housing. A location is different. It comes with the jobs nearby, the weather, the view, your family, your friends, your routine. You can see that pretty clearly in the Palisades right now. After the fire destroyed thousands of homes, 64% of residents whose properties were destroyed or seriously damaged said they planned to rebuild there. They could start over somewhere else. A lot of them don’t want to. They want to be back in the Palisades. You can build the same house in Dallas. You can’t build PCH there.

In expensive markets, the land under the house can be worth as much as the structure on top of it, sometimes more. In cheaper, faster-building metros, the balance usually runs the other way. You are not paying $1.1 million for a house. You are paying a Houston price for the house and the rest for where it stands

And none of this means Texas is bad at “cities”. That’s not the argument. Texas is quite good at cities, actually. Housing is a third of the price, no state income tax (property taxes claw a share back), real jobs, real food. Comparing California to Texas on a spreadsheet, Texas wins, and people act on it: Census estimates put the California-to-Texas flow at about 77,200 people in 2024, the busiest state-to-state route in the country that year. People move for jobs, family, politics, divorce, timing. If California and Texas were really selling the same thing though, you would expect that much migration to close at least some of the price gap. More people in Texas should push prices up there, while fewer people in California should take some pressure off here.

It hasn’t produced anything close. Texas’s prices spiked, then cooled, most visibly in Austin. The gap never converged. Years into the country’s biggest domestic migration story, LA’s median asking price still runs more than three times Houston’s. If the two markets sold the same product, that kind of gap would be hard to explain. They don’t. The people who moved absolutely got more house for their money. They also changed everything around the house: the weather, the commute, the people around them, and whether the ocean is twenty minutes away or a plane ride away. Because here’s the thing about a place like LA: there’s a line to get in. Lose a hundred thousand people and the line just moves up. Texas can always build farther out. Nobody can build another Los Angeles. You can copy the house. You can’t copy where the house sits.

The mansion video compares the part of the purchase Zillow can photograph and ignores the part where the money actually went. “But then I’d be living in Texas” isn’t really a defense of LA prices. It’s the point. The house is only part of what you’re buying.

But my favorite part of the migration data is what happened in the other direction. In 2024, about 45,400 people moved from Texas to California. No other state sent more people to California that year. The survey can’t say who’s moving back home and who’s arriving for the first time. However, every one of them looked at triple the price for a fraction of the house and signed anyway. If you ever took micro econ, you know what’s happening: they’re maximizing utility, not square footage.

Because nobody moves to California for more square footage.