The Grass Isn’t Always Greener: Why California May Be the Smarter Choice Over Sun Belt and Bible Belt States

A balanced view of California's advantages over Sun Belt states with icons for housing, insurance, wages, and cost of living factors
Thinking about a move from California? Weigh the pros and cons before making a decision

California has long been criticized for its high cost of living, leading many residents to consider relocating to “cheaper” states like Texas, Florida, and Tennessee. On the surface, lower home prices and the absence of a state income tax in some of these states seem appealing. However, when examining the full financial picture, the grass isn’t always greener. The hidden costs of living in these states often negate the perceived savings. Here’s why California might still be the better long-term choice for financial stability and overall quality of life.

Key Factors That Shatter the Myth of Cheaper Living

1. Lower Wages vs. Higher Costs

California boasts a median household income of California in 2023 is $96,334, and the median household income in San Diego in 2024 is $119,500. This is based on the U.S. Department of Housing and Urban Development’s (HUD) formula for income limits, which are adjusted for high housing costs!

It is significantly higher than Texas ($71,522) and according to HUD, the median household income in Houston, Texas in 2024 is $57,420,

In Florida ($65,937), with The median household income in Miami, Florida in 2023 was $59,390., and Tennessee ($59,695). While housing prices in Sun Belt and Bible Belt states may initially appear lower, wages in these states fail to keep pace.

Lower earnings mean residents often struggle to manage their financial obligations, leading to higher reliance on credit and greater personal debt. In contrast, California’s higher income levels allow for better financial stability, offsetting the higher housing costs.

2. Insurance Costs: The Hidden Burden

Insurance premiums in states like Florida and Texas are a significant hidden cost.

  • Florida: Homeowners face some of the highest insurance premiums in the nation, averaging $4,231 annually. Due to hurricane risks, many insurers are withdrawing from the state, leaving residents with limited and costly options. Additional flood insurance typically costs an extra $723 annually, pushing overall insurance expenses to unsustainable levels.
  • Texas: Frequent tornadoes, hailstorms, and floods result in average home insurance premiums of $3,081 annually. Many Texans also require additional windstorm and flood coverage, further inflating costs.
  • Tennessee: While less exposed to hurricanes, Tennessee residents still face above-average premiums due to increasing storm risks, averaging $1,900 annually.
  • California: Thanks to its relatively stable climate, California’s average annual home insurance premium is $1,565—dramatically lower than Florida or Texas. Over a 30-year mortgage, these insurance savings can amount to $75,000-$90,000, negating much of the perceived savings of moving to a “cheaper” state.

3. Property Taxes and Local Fees

States like Texas and Florida may promote their lack of state income tax, but high property taxes often offset these savings.

  • Texas: With an average property tax rate of 1.80%, a $300,000 home in Texas incurs $5,400 annually in property taxes. This rate is more than double California’s average of 0.73%, where the same home would cost $2,190 in taxes annually.
  • Florida: Property taxes average 0.89%, but additional hurricane and flood management fees, along with special assessments, significantly increase annual housing costs.
  • Tennessee: With an average property tax rate of 0.64%, the state appears competitive but lacks the robust homeowner protections seen in California.
  • California: Protected by Proposition 13, California homeowners enjoy a more predictable and stable property tax system, making it easier to plan for long-term financial goals without fear of rapid increases.

4. Foreclosure Rates Offer a Stark Indicator

Foreclosure rates reveal the financial strain experienced by homeowners in different states:

  • California: Among the lowest foreclosure rates, with 1 in every 2,627 housing units, reflecting stronger economic stability and consumer protections.
  • Florida: Higher foreclosure rates at 1 in every 1,841 housing units, underscoring the financial pressures of high insurance costs and lower wages.
  • Texas: Moderate but concerning rates at 1 in every 2,059 housing units, reflecting a less forgiving economic environment.
  • Tennessee: Higher than California, with foreclosure rates nearing 1 in every 1,950 housing units.

5. Cost of Living Index Highlights True Affordability

When factoring in wages, taxes, insurance, and housing costs, California offers better long-term financial stability compared to Sun Belt and Bible Belt states. While the cost of living index for states like Florida, Texas, and Tennessee may seem appealing, lower incomes and higher hidden costs—like insurance premiums and property taxes—often negate any perceived savings. California’s higher wages and broader access to credit create a more sustainable economic environment for its residents.

Why California’s Grass May Be Greener

Higher Wages Create Financial Stability

California’s robust economy supports higher wages across multiple industries, enabling residents to manage higher housing costs while maintaining a better quality of life. The $20,000-$30,000 difference in median household income compared to Sun Belt and Bible Belt states significantly increases purchasing power over time.

Insurance Savings Build Wealth

Lower insurance premiums in California translate to tens of thousands of dollars in savings over the life of a mortgage. These savings can be reinvested into retirement accounts, education, or other wealth-building opportunities.

Stable Property Taxes Protect Homeowners

California’s Proposition 13 ensures predictable and lower property taxes, shielding homeowners from sudden increases that are common in other states.

Financial Literacy, Support Systems, and Protections Reduce Debt

California residents benefit from stronger consumer protections, better financial education, and state programs that assist with housing costs, helping to reduce financial strain.
California’s consumer protections and access to credit help prevent predatory lending practices and reduce foreclosure rates, providing a more secure financial future.

Health Insurance + Housing Costs: The Real Monthly Hit

Let’s do what Zillow memes never do: look at the full cost picture.
Sure, a $350,000 home in Arizona or Texas looks “cheaper” than a $700,000 starter in San Diego. But here’s what they’re not telling you:
🏥 Healthcare:
California has 10 competitive insurance providers in the individual market—some “cheaper” states have as few as one, which means less choice and higher premiums.

Thanks to expanded Medi-Cal and generous state subsidies, California boasts the highest insured rate in the nation, covering about 94% of residents. Many qualify for low-cost plans starting as low as $10/month through Covered California. About 90% of enrollees receive financial assistance, and some even qualify for $0 premiums.

For example, individuals earning under $25,760 annually can find quality plans averaging around $43 per month. Medi-Cal provides free or very low-cost coverage for eligible low-income residents, including undocumented individuals, making healthcare accessible to many Californians who might otherwise go uninsured.

In contrast, states like Texas and Florida:

  • Offer fewer insurance options, less competition, and higher premiums
  • Have rejected Medicaid expansion, leaving millions in a coverage gap
  • Families often pay $1,200–$1,600/month for mid-tier plans, with higher deductibles and fewer benefits

So while people think they’re “saving” $500/month on a mortgage, they’re often spending that—or more—on health insurance alone—and getting less coverage and fewer protections in return.

So what’s the actual outcome?

You move to “save money”…
But after adding up insurance, taxes, gas, and medical bills—you’re breaking even or losing ground, with fewer protections and lower long-term equity.

California isn’t expensive—it’s transparent.
Other states just hide the costs until it’s too late.

Think Long-Term: Implications of Moving

Relocating to states like Texas, Florida, or Tennessee may appear cost-effective initially, but the hidden financial burdens can erode these benefits over time.
Lower housing costs do not always translate to better affordability From exorbitant insurance premiums to high property taxes and lower wages, the true cost of living in these states often surpasses that of California and may leave you worse off financially.
California’s higher wages and economic opportunities often outweigh the short-term appeal of lower housing costs in other states.
When considering a move, it’s essential to look beyond the surface to understand the full financial implications.

Recent Research Findings

Recent studies have highlighted significant financial challenges in Bible Belt states, including higher debt levels and increased foreclosure rates.

  • Higher Debt Levels in Bible Belt States: A WalletHub study titled “States with the Most People in Financial Distress” identifies several Bible Belt states among the most financially strained in the U.S. The study used metrics such as credit score changes and internet searches for “debt” and “loans” to rank states. Texas, for instance, ranked second due to low average credit scores and high search rates for financial assistance.
  • Increased Foreclosure Rates: Foreclosure data indicates that some Bible Belt states are experiencing higher foreclosure rates. For example, Florida had a foreclosure rate of one in every 3,086 housing units in October 2024, placing it among the states with the highest foreclosure rates.

These findings suggest that residents in Bible Belt states may face greater financial challenges, including higher debt burdens and increased risks of foreclosure, compared to other regions.

References

Additional Sources:

  • Florida Ranks Fifth in Cost-of-Living Crisis, alongside other Southern states like Louisiana, Mississippi, and South Carolina.: What It Means for Residents and Families  Central Florida Lifestyle
  • Study: Sunbelt States Have Higher Household Debt Than Midwest States WRE News
  • The U.S. States Most Impacted By Household Debt 2023 National Business Capital

SEE ALSO
The Comeback State: Why Moving to or Back to California is the Smarter Choice

The Comeback State: Why Moving to or Back to California is the Smarter Choice

California: Positive Outlook for 2025 | Brad & Karen Mattonen | HomesinSDCounty Your Smart Move with Coldwell Banker West 🏡 www.homesinsdcounty.com | 858-518-2875

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