Goods and services are worth what someone is willing to pay, end of story. The price of the home is determined by the monthly carrying cost and the income of the people in the region. If the average middle class family is willing and able to spend $3K/month in an area for their housing costs, then the average middle class family home will cost around $3K/month. The home price only reflects a part of the carrying cost as mortgage principal and interest. The tax burden isn’t shown, nor are the maintenance and energy costs. These are waaaaaay higher in Texas than in San Diego. Also, homes are bigger in Texas so families buy more crap to put in them which leaves less money for the house payment, energy bills, property taxes, etc…
A more reasonable comparison might be between homes in the IE and Texas since the energy costs would be more comparable (at least in the summer). The tax structure will still be different, however.
Material costs are a little different. Bricks are very cheap in Texas since there is a lot of clay there to make them out of. Texas builders love a California buyer because they can fool them into thinking they’re buying a brick house when in reality it’s just a brick facade covering up crappy 2×4 framing.
Regulation does contribute some to the increased costs here in California, but it is probably not that big of a component. Labor costs will be similar since there is a lot of illegal employment in both places.
