A Tale of Two Cities: Los Gatos, CA and Boerne, TX
Introduction
This article compares two cities, one in Silicon Valley, California, and the other in Texas Hill Country, just north of San Antonio, TX. It provides an overview of each town and a comparison of the real estate costs for each.
Los Gatos, CA
Los Gatos, California, is a charming town located in the San Francisco Bay Area, specifically in Santa Clara County. Nestled in the foothills of the Santa Cruz Mountains, it offers a picturesque setting with a blend of natural beauty and suburban comfort. The town is known for its historic downtown, tree-lined streets, and upscale residential neighborhoods.
Downtown Los Gatos, CA
Geographic Location
Los Gatos is situated approximately 60 miles south of San Francisco and about 10 miles southwest of San Jose. It is easily accessible via major highways, including Highway 17, which connects it to the Santa Cruz coast and the rest of the Bay Area. The town's proximity to the Silicon Valley tech hub makes it a desirable place for many professionals working in the region.
Economic Makeup
The economic makeup of Los Gatos' residents is largely influenced by its proximity to Silicon Valley. Many residents are high-income earners employed in the technology sector, including executives, engineers, and other professionals from major tech companies like Apple, Google, and Netflix. The town has a high median household income, reflecting its affluent population.
Additionally, Los Gatos has a vibrant local economy with numerous boutique shops, fine dining restaurants, and luxury services that cater to its wealthy residents. The presence of high-quality schools, a range of recreational activities, and a strong sense of community further enhance its appeal as an upscale residential area.
Boerne, TX
Boerne, Texas, is a charming and rapidly growing town located in the Texas Hill Country, about 30 miles northwest of San Antonio. It offers a blend of small-town charm, natural beauty, and a rich cultural heritage.
Downtown Boerne, TX
Geographic Location
Boerne is situated in Kendall County, easily accessible via Interstate 10, which runs directly through the town. Its location provides residents with a peaceful, rural setting while still being within a short drive to the amenities and attractions of San Antonio. The town is characterized by rolling hills, scenic landscapes, and the presence of the Cibolo Creek.
Economic Makeup
The economic makeup of Boerne's residents is diverse, reflecting a mix of traditional industries and modern growth. The town has a strong sense of community with a vibrant local economy that includes retail, dining, and professional services. The historic downtown area features a variety of shops, restaurants, and galleries, attracting both locals and tourists.
In recent years, Boerne has experienced significant growth, partly due to its appeal as a suburban retreat for professionals working in San Antonio and the surrounding areas. The town has seen an influx of higher-income families and retirees drawn to its quality of life, excellent schools, and outdoor recreational opportunities. Boerne's economy also benefits from agriculture, ranching, and a growing number of small businesses and tech startups.
Overall, Boerne maintains a balance between its historical roots and modern development, making it an attractive place for a wide range of residents.
The Greatest Difference is Real Estate
Both towns are located near major cities, Los Gatos near San Jose, the nation’s 13th largest city, and Boerne, near San Antonio, the nation’s 7th largest city. Both towns have excellent school systems, vibrant downtowns and cultural diversity. A big differentiator is the cost of housing. Following is a comparison between a house that recently sold in Los Gatos for $3.1M and a house that’s available for sale at what the homeowners in Los Gatos used for the down payment, $1.9M
The Los Gatos House
The address of the house in Los Gatos is104 Amanda Lane, Los Gatos, CA 95032. It is 1,497 square feet on a 0.21 acre lot and has 3 bedrooms and 2 bathrooms. This link will take you to the listing information and includes many pictures of the home.
The house sold for $3,010,000 and the new owners made a down payment of $1,100,000 leaving the owners with a mortgage of $1,910,000 with an interest rate of 6.37%. With an estimated annual property tax of $45,150, an estimated annual insurance payment of $10,234 and monthly principal and interest payments of $11,704.93, the total monthly payment on this home is approximately $16,320.
Finances
A household income of at least $544,000 / year is required to qualify for a total monthly mortgage payment (PITI) of $16,320. The average household income in Los Gatos, CA, is approximately $305,653. The median household income is around $198,117. As of 2022, the median household income in the United States was $74,580.
Even though the median household income in Los Gatos is about 2.7 times that of the US median income, way less than half the people living in Los Gatos can afford to buy a modest 3 bedroom, 2 bathroom house. And this is why so many middle and upper-middle income people are fleeing California. It simply has become unaffordable to raise a family in a nice home in a safe neighborhood that has high quality schools.
What One Can Get for That Down Payment in Boerne
For just under what that couple spent as a down payment ($1,100,000) for the house in Los Gatos, they could have bought this house outright, in Boerne. A 3,310 square foot (more than twice the size,) 4 bedroom, 4 bath home on 3.34 acres. The approximate annual property tax on this home would be $22,000, less than half the Los Gatos house.
A Picture is Worth a Thousand Words
Front of the Houses
Here are a few visual comparisons of the two houses. The one in Los Gatos is $2.1M starter home with cracks in its driveway. The $1.065M house in Boerne is something that owners would be proud of. How would you rather live?
Front of $3.1M Los Gatos House vs. Front of $1.065M Boerne House
Kitchens
A tiny galley kitchen vs. a chef’s delight.
Living Rooms
A cramped room with low ceilings vs. an entertainer’s delight.
Back Yards
A cramped deck with an air conditioning unit vs. a veritable paradise.
In Conclusion
Having lived in California for 30 years, the last 23 of them in Los Gatos, I can attest to the challenges of staying in the state. We initially stayed because we believed we were in one of the best school districts in the state. However, remote learning during COVID exposed many flaws in the school system. Discovering that our son's Spanish teacher encouraged students to use "Google Translate" was the final straw.
We had already grown tired of the taxes, over-regulation, crime, homelessness, and political climate. When we realized that our main reason for staying was no longer valid, we put our house on the market and found a better life for our family. Our only regret is not making the move sooner.
If you have the flexibility to work remotely and want to buy a home you can be proud of, in a great community with good schools, please reach out to me. After almost 40 years in high tech, I became a Realtor to help people like you find a better life for your family.
Want to Buy or Sell a Home?
Please contact me at either Bill@HillCountryHomesteads.com or 408.827.8484.
I am directly connected to more than 1100 California real estate agents. They know who are selling and looking to move to Texas, often with sufficient equity to buy your home outright, in cash, and those that are priced out of the market and looking for an affordable community with good schools to raise their families.
Sellers that list their homes with me will have their homes directly and professionally presented to all of these California agents.
