Arizona Vs. California?

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Submitted by sdsurfer on February 8, 2013 - 2:07pm

So my friend that goes surfing every weekend just mentioned he's thinking of taking a great job offer in AZ.

I'm sure there is a thread or two somewhere on this board from a person that is fed up with California housing prices and left for Arizona or anywhere else in the nation, but is there a thread that attempts to compare the true cost of living in Arizona compared to CA?

Maybe someone can chime in that made such a move already and can share their experience?

I do recall that back in my SDSU days the AZ crew pretty much took over mission beach in the summer...so I know it's freakin hot out there, but I was thinking more of the costs such as daycare, food, entertainment, etc. that might be equal or might not. I have no idea myself since I never left and do not intend to any time soon.

Thanks!

Submitted by spdrun on February 8, 2013 - 2:11pm.

Where in AZ? Phoenix is a hot, dusty dump with a lot of unpleasant people. Up north and Tucson are more tolerable.

Submitted by sdsurfer on February 8, 2013 - 2:22pm.

I think he said North Phoenix...is that the epicenter of the dump of unpleasantness? Maybe everyone that moved there expected more and ended up with a nice quarter acre lot on the sun so they are unhappy about it?

Submitted by spdrun on February 8, 2013 - 2:27pm.

A quarter-acre lot which is unbearable to use for anything outdoorsy 4 months out of 12. Much rather have a condo in CA with no lot and access to a lot of beautiful public park space.

I know a few people who bought in Phoenix in 2006-7 and are basically stuck there, wishing they could either move to CA or back to NYC. A big lot isn't all that it's cracked up to be.

Submitted by The-Shoveler on February 8, 2013 - 2:29pm.

Seriously ?
I don't think a Coastal SoCal native would be able to survive Phoenix regardless of the lot,

In the summer it is like 90 degrees at midnight in September.

I talked to people who were so happy just to get back to TV after the bust. (Let that sink in a little).

Most front yards are just dirt, no trees, no green anything.

Submitted by spdrun on February 8, 2013 - 2:32pm.

And if you do have serious irrigation or a pool, it becomes a mosquito paradise. Yeah, surprising, but the skeeters are BADASS out there.

Submitted by no_such_reality on February 8, 2013 - 2:49pm.

sdsurfer wrote:
I think he said North Phoenix...is that the epicenter of the dump of unpleasantness? Maybe everyone that moved there expected more and ended up with a nice quarter acre lot on the sun so they are unhappy about it?

North Phoenix is California east. Phoenix area in general has a real problem with Californians coming and bringing the California nuttery they want away from with them.
Arizona versus Cali:
Housing, cheaper, way cheaper.
IncomeTaxes, cheaper, top marginal rate is like 4.5%
Sales tax, cheaper, 6% versus 8%
Property taxes, a bit higher.
Electricity, about 25% cheaper, but you use more so closer to a wash. No solar rebates, foot the bill yourself, it'll pay.
GDP, lower overall but higher per Capita. They have 1/6th our population and 1/4th our GDP
Gas, lower, about 10%
Food, higher, about 10% Meat is shockingly expensive in Phoenix for some reason.
Wages anywhere from 25% less to on par depending on skill.

http://www.numbeo.com/cost-of-living/com...

Submitted by sdsurfer on February 8, 2013 - 2:55pm.

Good stuff NSR. I'll send him that website or send him to this thread.

Kind of interesting that food is more expensive as he does have 2 kids so food would be a big consideration?

On the wages part....I would personally believe that CA would attract more applicants thus having to pay a little more for the more qualified ones, but I also know people refer to employers knowing people want to live in CA so they can sometimes pay less.

Can anyone chime in on the job front? I think his wife would have to find a new job out there.

Submitted by spdrun on February 8, 2013 - 2:58pm.

I don't know -- when I went shopping with a friend in Phoenix, some food (not only meat, some fruits and veggies) was actually more than I paid in NYC.

Submitted by CDMA ENG on February 8, 2013 - 3:14pm.

Three reasons not to move to PHX...

No Tourmo

No Swami's

No San O/C

Former Zonie resident.

CE

Submitted by MistaVista on February 8, 2013 - 3:15pm.

I am the friend and here is some of the reasoning.
1) Housing cost- For $350k I can purchase a newer home with 4-5 bdrms, and 3 plus baths, with a pool and a 3 car garage for my boat ;)
2)Even if I find something in my price range here there is a slim chance I will get it, it will be similar to the house in South Park where I was told I can't even look at it unless I submit an offer.
3) This house Arizona would be in a high end neighborhood with premier schools while here for that I would get a condo in a low end neighborhood with poor schools take (10 out of 10 versus 5 out of ten using south park as an example).
4)This brings us to education...California has 500 plus million in unfunded teacher pensions and no plan how to pay for it, unless the genius Browns magic bullet train is the first train to be profitable.
5) Longterm Goals- it is difficult to plan for college tuition, retirement and gain equity when my wife has the best paying job she has ever had and we are living paycheck to paycheck in a 1000sq. ft rental for 2k/mo.

Maybe its hot, of Course I will miss surfing but its seems like a smart move even though some may disagree.

Submitted by spdrun on February 8, 2013 - 3:36pm.

So your argument mainly has to do with real estate costs. Why not just stay in CA and buy rentals in an area that has a more favorable buy-to-rent ratio, using the income from them to finance a better lifestyle in CA?

$350k of rental property (financed) should net you $10-15k/yr at least, putting a dent in that 1000 sf condo expense. Keep in mind that average house size up till the '70s in America was about 1000 sf, so don't discount living in that size home with a family (people do it all the time in New York).

Submitted by no_such_reality on February 8, 2013 - 3:39pm.

spdrun wrote:
So your argument mainly has to do with real estate costs. Why not just stay in CA and buy rentals in an area that has a more favorable buy-to-rent ratio, using the income from them to finance a better lifestyle in CA?

Probably because he's struggling to pay rent now. That's the pay-check to pay-check line and $2000/rental. You can't get financing for a rental purchase if your debt to expense ratio on living is already too high. They won't count rental income until it's established. So buying to back fill his living expenses isn't likely an option.

So I have a friend that left seven years ago, still happy.

Do your pro-con to moving.

To be honest, since you don't own a home now, the only con I see to trying the move is the age of your children and potential distance then to family.

Go, decide if you like it and stay, decide you don't like it, move back. A 1000sf place packs easily into a U-haul.

Submitted by spdrun on February 8, 2013 - 3:42pm.

You LIE. Take the job in Phoenix, buy something that's suitable as a rental, get yourself fired, then rent it out and hightail it the hell back to CA. (And yes, you'll pay a higher rate to get that flexibility, but it's worth it.)

Also, if he can buy $350k of property in Phoenix, he can do the same in Escondildo or Visduh. Rent expense doesn't count if you're officially buying a primary.

Submitted by no_such_reality on February 8, 2013 - 3:48pm.

spdrun wrote:
You LIE. Take the job in Phoenix, buy something that's suitable as a rental, get yourself fired, then rent it out and hightail it the hell back to CA. (And yes, you'll pay a higher rate to get that flexibility, but it's worth it.)

Also, if he can buy $350k of property in Phoenix, he can do the same in Escondildo or Visduh. Rent expense doesn't count if you're officially buying a primary.

So you're saying what I said. Go, try it. Decide you like it or not.

And yes, he could buy a $350K place here too. He said that. I think he implied $350K isnt' that great. Or yea, he could move to Visduh. Now what's the real difference between Visduh and Phoenix?

IMHO, if you don't live within bike riding distance of the beach, the reality is most people are lucky to go once or twice a year. Surfers included, it's amazing how many surfboards you see in garages East of I5 versus how many you see driving down to the beach from east of the I5...

And call me old fashion, I try to minimize my options that start out "you LIE" :-)

Submitted by spdrun on February 8, 2013 - 3:51pm.

No, he could "move" to Visduh and turn the property into a rental within a year, using it to offset his $2000/mo rent closer to the coast.

There's a big difference between Visduh and Phoenix, actually. One happens to be in a desert hell. The other happens to be ~10 mi from some of the finest coastline in the USA -- whether you use it is up to you, but 15 min drive is a lot closer than 6 hours'.

And yes, I have no problem with using an employer's offer to acquire rental property, then dropping the employer like a hot potato when their usefulness has expired. They do that all the time with employees; nothing wrong with turning the tables a bit.

Submitted by sdduuuude on February 8, 2013 - 4:01pm.

I grew up in Tucson - spent the first 21 years of my life there. I have only been back to visit friends and parents since leaving in 1989. My parents eventually followed me out here about 8 years ago. My mom doesn't miss the critters or the heat at all.

I tell people that Tucson is a great place to be from. Had a great time as a kid. We lived up in the foothills and the desert was our playground. It is generally boring, though, for a 20-something. I was glad to get out to a place where there was more to do than get drunk and go hiking.

I have occasionally said that I would rather live in Phoenix than Poway. It is hot enough in Poway that it makes sense to save the money and move to Phoenix.

I am familiar with the South Mountain/Awahtukee area. It is pretty nice. Can get 5K sq. ft. homes backing up to beautuful desert preserve for 900K. Great family homes nearby for $300K. Very good schools. If you can live with the problems below, go for it. The high-end homes in AZ are pretty nice.

I compare Tucson and Phoenix to San Diego and LA. LA/Phoenix about 100 miles north. They are bigger cities with the benefits and drawbacks of bigger cities. San Diego / Tucson are smaller, more laid back.

Yes, its hot. If you can't deal with it, there is no hope. I lived with it for 21 years. I could deal with it if I had to. It is highly preferable to a cold climate where you have to take off and put on bulky clothing every time you go in or outside.

A long-term trend in Phoenix is that the population boom is changing the climate for the worse. More AC means the indoors are cooler, but the outdoors are hotter because they pump heat to the outside. Turns out there are enough of them that the ambient temperature of Phoenix is rising. All the pools and lawn irrigation have increased humidity as well. I'm not a big environmentalist, but I actually wonder about the long-term sustainability of life in Phoenix.

In the 70's and 80's, folks from the east coast moved to Tucson by the boatload (joke intended) and planted plants all over town that measurably raised the pollen count in Tucson. This is a serious consideration. If you have any kind of allergies to dust or pollen, the desert can be unlivable. I would occasionally have to leave class because of sneezing fits. The choice was - breathe freely and fall asleep due to medicine, or suffer and be alert. I didn't know how bad I had it until I left. I have no allergies in San Diego but when I am in Arizona, I wake up with a nose full of gunk every morning. Even if the pollen doesn't get you, the dust can.

People think Summer is the worst time and suggest living through a Summer before you decide you like it. I say - be sure to spend some time in AZ in the Spring to make sure you can tolerate the pollen and dust. It is a unique form of personal hell if you can't.

Politically, Phoenix is so much more conservative than Tucson. They do stupid things, just like any government, but they are stupid in an entirely different direction.

Submitted by no_such_reality on February 8, 2013 - 4:01pm.

Yea, buy, live, move. That's fair. I wouldn't call that lying. Nor would I call taking the job and deciding it's not for you lying either. Even if only for 180 days. Maybe even 90 days. If it's not for you, it's not for you.

He's still have the challenge moving out of the place in Vista. Landlords may squeak on his cashflow. Buying until that rent is establish, still stands.

Can I really net $10-$15K or is it gross? That place going to rent for $2500 a month with essentially no expenses other than PITA? I may need to look south! That's a 16% COC return.

Submitted by spdrun on February 8, 2013 - 4:05pm.

I was thinking "long enough to buy." Which might be 30-90 days for all I know :)

As far as landlords, I'm guessing he has $70k in the bank for downpayment. Nothing wrong with dropping $12k cash up front for 6 mo rent on something nice that's not in Vista (or Phoenix).

Submitted by sdsurfer on February 8, 2013 - 4:15pm.

[quote=davidaaronhart [at] hotmail [dot] com]I am the friend and here is some of the reasoning.
1) Housing cost- For $350k I can purchase a newer home with 4-5 bdrms, and 3 plus baths, with a pool and a 3 car garage for my boat ;)
2)Even if I find something in my price range here there is a slim chance I will get it, it will be similar to the house in South Park where I was told I can't even look at it unless I submit an offer.
3) This house Arizona would be in a high end neighborhood with premier schools while here for that I would get a condo in a low end neighborhood with poor schools take (10 out of 10 versus 5 out of ten using south park as an example).
4)This brings us to education...California has 500 plus million in unfunded teacher pensions and no plan how to pay for it, unless the genius Browns magic bullet train is the first train to be profitable.
5) Longterm Goals- it is difficult to plan for college tuition, retirement and gain equity when my wife has the best paying job she has ever had and we are living paycheck to paycheck in a 1000sq. ft rental for 2k/mo.

Maybe its hot, of Course I will miss surfing but its seems like a smart move even though some may disagree.[/quote]
Bullet train? that was random?

Submitted by no_such_reality on February 8, 2013 - 4:20pm.

I know many on the board thinking rental properties could do it, but I think this is a first home for them.

I don't want to put words in his mouth, but bandying $70K downpayment and up front $12K cash for 6 months rent starts to sound like real money, particularly for someone doing first home and saying paycheck to paycheck.

That's $82K to whip out without bleeding their emergency funds dry.

Submitted by sdsurfer on February 8, 2013 - 4:21pm.

spdrun wrote:
So your argument mainly has to do with real estate costs. Why not just stay in CA and buy rentals in an area that has a more favorable buy-to-rent ratio, using the income from them to finance a better lifestyle in CA?

$350k of rental property (financed) should net you $10-15k/yr at least, putting a dent in that 1000 sf condo expense. Keep in mind that average house size up till the '70s in America was about 1000 sf, so don't discount living in that size home with a family (people do it all the time in New York).


I was born in 77 so I didn't live through them really, but that is an interesting point about the smaller home sizes. Maybe if more of us could accept a more reasonable existence we might actually end up with some money at the end of the month huh? It seems like all new homes are at least 3k sq. ft these days and 2500 ends up being the average when in actuality how many square feet do two people and a kiddo or two need? Thanks for mentioning that!

Submitted by spdrun on February 8, 2013 - 4:57pm.

I don't think I've ever lived in a 3000 sf house (OK, the house on my mom's farm qualifies now, but 1/3 of that is workshop space). I'm pretty sure I wouldn't want one till I could afford a live-in maid -- vacuuming 400 sf is just fine without me without multiplying that number by 8!

Submitted by Want_to_Retire on February 8, 2013 - 4:57pm.

So much bias against Phoenix! I will provide some balance here. Disclosure: I grew up in South Bay, live in OC - half my life I was close to the beach and the other half - inland. Own 2 rentals in Phoenix, just closed on a 3rd today. I've worked in Phoenix for months at a time, good times (winter) and bad (summer). Here's my take on Phoenix:

First of all, if you absolutely need the beach (vs. say big pools - all beach types know what I'm talking about) - Phoenix is not for you. If you have very low heat tolerance or don't like AC - Phoenix is not for you. If you don't appreciate desert scapes - Phoenix is not for you. Other than that:

1. Much more convenient than LA, OC or SD. The town looks like LA sprawl, but is lot less densely populated. I can go from the far north of town to the far south in rush hour in 20 minutes (don't go to west Phoenix - lots of housing development and attendant traffic0
2. Lots of good restaurants - which you can conveniently get to. Not to say LA, OC or even SD don't have the same, but they are too far away, too crowded, too much of a hassle to get to. If you live in central or north central Phoenix, the choices within a 10 minute drive is fantastic. And more, better Mexican food for sure.
3 Bars Unlike most of SoCal, Phoenix takes after the snow-bitten east - bars are a way to escape the confines of home and inhospitable weather. If you like to socialize at bars - it's a great place to find one or half a dozen you like right near home.
4. Resorts. Between Phoenix and Scottsdale, lots of fabulous resorts. When I have to be there during summer, I stay for motel prices, and then spend my leisure in the pool, with food and drinks served to me at reasonable prices - it's really a fun way to spend the time.
5. Entertainment. Like SD, Phoenix has professional football and baseball, add basketball and ASU. Phoenix is dotted by mountains in the middle that is great for a quick hike. It's 2 hours away from beautiful Sedona and other interesting towns. 'Culturally' (museums, theater, etc.) it's no LA but no worse than OC or SD. Same thing with shopping if you count that as entertainment (I don't).
6. People. We make fun of AZ but I like the people. They move a little slower but are friendlier and more serious about their work. From doctor, pharmacist, bankers, real estate agents, convenience store clerks and waitresses - they do a better job and are more friendly and efficient than California (I'm including SF - been working here for a year)
7. Value. Hard to beat California - I lived through 2 housing depressions and still made money just living in my home. And Phoenix of course is foreclosure central - makes the IE look tame. However, even now, after some crazy bubbling in the past year, house values are still below rental parity - way below.

Hope this helps!

Submitted by flyer on February 8, 2013 - 5:11pm.

As a San Diego native who has lived in AZ (even though we kept the house and other properties in San Diego), and still have rentals there, here are a few of my thoughts.

If this is a purely financial decision, and you are moving for a really great job for which you can't find the equivalent in San Diego or any other place you might prefer, it sounds like a good plan.

Depending on where you will be working, housing choices in the Valley, like Ahwatukee, Chandler (Ocotillo) Scottsdale, Paradise Valley, Cave Creek, Carefree, Desert Ridge and the Anthem developments (some here are "pricey,") are great for families.

The bottom line is AZ is what it is. If you are aware of all of the pros and cons and can adapt, and make the best of it, knowing you have made your choice for sound financial reasons, it should probably work out fine for you and your family. In fact, you'll probably save enough to be able to return to San Diego someday if you so choose.

IMO, this is a far better plan for a young family than burning up everything they make during their peak earning years--living paycheck to paycheck in CA--then ending up with nothing saved in their retirement years.

Submitted by spdrun on February 8, 2013 - 5:17pm.

Other than housing costs, SD is cheaper than Phoenix in many ways. If you're NOT looking for rentals and just to live somewhere, is it really totally impossible to find a 1000-1200 sf condo for under $400k (I've seen a few in acceptable areas myself)?

People in SD can't save anything because they CHOOSE to live the "lifestyle" in 3000 sq ft, rather than enjoying their surroundings and realizing that square footage ain't everything.

Submitted by bearishgurl on February 8, 2013 - 5:18pm.

sdsurfer wrote:
spdrun wrote:
So your argument mainly has to do with real estate costs. Why not just stay in CA and buy rentals in an area that has a more favorable buy-to-rent ratio, using the income from them to finance a better lifestyle in CA?

$350k of rental property (financed) should net you $10-15k/yr at least, putting a dent in that 1000 sf condo expense. Keep in mind that average house size up till the '70s in America was about 1000 sf, so don't discount living in that size home with a family (people do it all the time in New York).


I was born in 77 so I didn't live through them really, but that is an interesting point about the smaller home sizes. Maybe if more of us could accept a more reasonable existence we might actually end up with some money at the end of the month huh? It seems like all new homes are at least 3k sq. ft these days and 2500 ends up being the average when in actuality how many square feet do two people and a kiddo or two need? Thanks for mentioning that!

sdsurfer, your "friend" (david?) and his spouse could easily buy a single family home in San Diego County for ~$350K . . . yes, much bigger than 1000 sf.

Even if they DO surf, they can't do it during the weekdays, anyway, while they are working and the kids are in school. There are PLENTY of surfers in SD County who live 25+ miles from their favorite surfing beaches and use them only on weekends and "staycations." It's really not that bad of a drive and parking is pretty easy at SD's beaches for eight months per year. When the "zonies" infiltrate them the other four months, it is VERY hard to park for EVERYONE who doesn't live within walking distance or ride the bus there.

"david" shouldn't expect to be able to buy his first home close to the beach. Almost no one does.

It's BS if one thinks there are no family-size homes available in this county for $350K which have access to acceptable to excellent public schools and even RV parking!

"david" should keep in mind that it's not "cheap" to air-condition a 2800+ sf ranch nine months per year in AZ. Water is cheaper in NV but in AZ it takes a LOT of water to keep landscaping alive ... hence, you see a lot of rocks in the yards instead of grass or ground cover.

And sdduuuude and other "experts" forgot to mention silverfish infestation ... just another fun fact about living in the desert :=]

I've been all over Phoenix and the average size lot there is about 5000-6000 sf (same as SD Co), yes, even in the northern suburbs. Of course, there are enclaves of sprawling ranch homes on 1/3+ AC, but they are NOT in the "$350K" range.

And having towed a boat and a few trailers through there, I can tell you that the traffic can be "horrendous."

And I don't see "david's" spouse making as much $$ in AZ as she does here due to a traditionally lower wage paid there.

Many of CA's former telemarketers, order-filler operations and collection agencies, etc actually moved their entire operations to AZ in the last 20 years almost solely due to the lower prevailing wages there.

Not biased against Phoenix as I have never lived there. But I think your argument that you can't find anything to buy for your family in SD County for $350K is disingenuous and a first-time buyer doesn't need to concern themselves with stuff like teacher's pensions, etc. Trust me when I tell you that your children will have acceptable to GREAT schools to go to right here in SD County and there are PLENTY of accredited state residents to apply for and fill ALL of the public school teacher slots which will be vacated by those many thousands of teachers retiring ... and then some.

I'd be interested to know exactly where you have been shopping for a home, david, and why you think you and your spouse should give up good jobs to take the drastic step of "moving to Phoenix" instead of buying a place here in SD County.

Submitted by spdrun on February 8, 2013 - 5:22pm.

However, it's not impossible to find a 2 bedroom condo within a few miles of the beach (biking distance) for that price.

Submitted by bearishgurl on February 8, 2013 - 5:39pm.

spdrun wrote:
However, it's not impossible to find a 2 bedroom condo within a few miles of the beach (biking distance) for that price.

The problem is that RV storage has really gone up in SD County in recent years. In the eighties, it used to be as little as $17 month to store a ski boat in dry storage. Now it's about $75 and up per month (depending on if the dry storage has gas and/or a loading dock).

There are PLENTY of houses in SD County with RV pkg/RV access for ~$350K.

Submitted by MistaVista on February 8, 2013 - 5:59pm.

I completely disagree with some of your statements. I think any buyer with children should be concerned with teacher pensions. Currently CA ranks 47th in spending per student and this coincidentally strongly relates to achievement levels. Do you think the schools here are going to get better or worse? I have lived away from the beach and I did miss it, but that being said I also found many things to do that were just as fun. I have surfed for the last 25 years and I know i am not going pro anytime soon, its just another hobby I have lots of them. currently financial stabilty and my children are more important. I have no desire to sit in traffic for multiple hours a day commuting back and forth from Rancho Bernardo. I am curious as to where these top notch schools are where one can find a Single family home for $350k in San Diego County? I am also curious for someone who has never lived somewhere how do you know the traffic is horrendous? Lastly in regards to wages there are far more companies leaving California than there are coming here to setup shop. How do you think that is going to effect the market longterm?

Submitted by bearishgurl on February 8, 2013 - 6:06pm.

flyer wrote:
. . . Depending on where you will be working, housing choices in the Valley, like Ahwatukee, Chandler (Ocotillo) Scottsdale, Paradise Valley, Cave Creek, Carefree, Desert Ridge and the Anthem developments (some here are "pricey,") are great for families.

The bottom line is AZ is what it is. . . .

Even flyer (fmr AZ resident) acknowledges that those "sprawling ranch" enclaves described by "david" are "pricey."

davidaaronhart... wrote:
1) Housing cost- For $350k I can purchase a newer home with 4-5 bdrms, and 3 plus baths, with a pool and a 3 car garage for my boat ;)...

david, where is the 4-5/3/3 located in or near PHX for $350K? And if it is NOT in PHX, how many miles away is it??

flyer wrote:
. . . In fact, you'll probably save enough to be able to return to San Diego someday if you so choose.

IMO, this is a far better plan for a young family than burning up everything they make during their peak earning years--living paycheck to paycheck in CA--then ending up with nothing saved in their retirement years.

I disagree with flyer on this issue. This assumption presumes a few things that likely will not take place, IMHO:

a) that RE values in CA coastal counties will stay stagnant or fall in the coming years;

b) that a CA worker moving to AZ is going to make more money there than if they stayed in their jobs in a CA coastal county; and

c) that one can make a profit in the future on a house they buy, maintain and possibly improve in the (grossly overbuilt) PHX area in the coming years; and

d) that the family who moves to AZ, by hook or crook, who DOES end up having more discretionary income every month isn't going to spend it (on water/desert toys and trips to SD to the "beach" to get out of the heat) and end up living from "paycheck to paycheck" anyway :=]

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