Dalantonio, Texas.
Home to millions. Soon millions more.
The notion of Dalantonio occurred to me on a recent drive from Dallas to Austin, south to Kyle, and West to Wimberly and Fredericksberg. What we’ve got here, supported by the sturdy spine of I 35, is a megalopolis, an urban area that stretches from Dallas to San Antonio much as fabled “Bos-Wash” stretches from Boston to Washington. Skeptics should look once again at the rising concentration of businesses along the highway between Dallas and Waco; the incredible traffic from Georgetown to far South of Austin; the extending growth of suburban San Antonio; the blinding growth of far exurbs like Kerrville, Fredericksberg, and Marble Falls.
What we’ve got here is a Sustainable Boom, the inevitable economic growth that occurs when more people move to a state than leave it.
The driving force? Technology, relatively low taxes, and a good home for new paychecks. Dalantonio is an incredibly competitive offering.
One indication comes from a recent exercise I did with “Smart Moves”, a CD-rom product from PHH Technology Services in Overland Park, Kansas. Intended as a relocation tool, “Smart Moves” allows you to examine your current living circumstances and compare them to over 300 metropolitan areas in North America. Included in the tools are housing, tax, education, and other statistics on hundreds of communities.
Dalantonio is a magnet because a paycheck goes further here. To test this I created a family of four with an income of $100,000 living in an average three bedroom house in Dallas, valued at $153,000— a figure substantially greater than the median resale price. The $120,000 mortgage on the house was refinanced last year.
( Yes, I know $100,000 is a lot of money. But it incorporates the possibility of two earners and makes it possible for a couple to consider moving to many areas that would be just plain impossible for a $50,000 or $60,000 couple.)
To acquire a similar house in San Jose, California the couple would need to spend $232,000 and would end up out of pocket some $14,000 after they had paid all expenses and put a down payment on the new house. In addition, their monthly discretionary income ( what’s left after mortgage, housing bills, taxes, and food) would have declined by $732 a month. To avoid a loss, the couple would need an up-front bail-out of $14,265… and a pre-tax salary increase of about $15,000 a year.
It should be noted that we aren’t talking about a wildly expensive community. The same couple, trying to find a house in Palo Alto, would need to pay $385,000, would be out of pocket $46,472 and would be short some $1483 a month in discretionary income… they would need about $30,000 additional income to maintain their Texas standard of living.
Some would say, “You can’t get there from here.”
The closest “deal” I could find was the town of Gilroy, best known for its annual garlic festival, an agricultural community that is now a distant suburb of San Jose. An average three bedroom house in Gilroy would cost $207,000, create an out of pocket expense of $11,210, and a $600 monthly decline in discretionary income.
Similar circumstances prevailed up and down the West Coast. The loss in San Francisco was nearly $1,000 a month, with higher figures in suburbs like Mill Valley, Larkspur, and Sausalito. Ditto San Diego, Seattle, and even Portland, Oregon.
Most of the East coast isn’t much different. The entire Bos-Wash corridor is more expensive than Dalantonio, Other hot spots— such as Raleigh/Durham, Atlanta, and Tampa— are rapidly becoming more expensive.
While there are major variations from one community to another, it remains that virtually every metropolitan area on either coast is more expensive than Dalantonio. Within the area, Dallas is more expensive than San Antonio. Whether it is more expensive than Austin is arguable. “Smart Moves” says it is. Homefair, another service, says Austin is more expensive than Dallas.
(You should know, by the way, that there isn’t a Last Word on this subject. The figures you get depend very much on assumptions. Smart Moves is concerned with measuring education, crime, and other non-financial aspects of a move as well as cost of living and housing changes. Homefair, a service on the World Wide Web, allows you to select cities all around the country and compare them. It indicated that you would need $154,800 in San Francisco and $144,025 in San Jose to duplicate a $100,000 salary in Dallas.)
Now play the same game in reverse. If you are a resident of San Jose, Seattle, Boston, or New Jersey, a move to Dallas can liberate a small fortune in real estate equity while providing a massive boost in discretionary income. For the San Jose employee, for instance, a move to Dallas is the equivalent of a 15 percent raise according to Smart Moves. It’s worth twice that to the Palo Alto resident.
The figures are still more favorable if you use the Homefair service on the Internet: Someone with a $100,000 income in San Jose only needs $63,865 in San Antonio, $69,432 in Dallas, or $70,936 in Austin. Basically, the benefits of a move are large multiples of annual raises. Very large multiples. ( You can check it out for yourself at: http://www.homefair.com.)
For a long term resident of either coast, the same move could easily liberate equity tied up in a house that could take a decade or more to save.
With boomers aging, financial assets more important, and housing assets less important, Texas is ready for a long boom.
(c) A.M. Universal, 1996