The dirt cheap homes are 20 miles out in the suburbs or in very high crime areas.
Plenty of homes are near the Medical center. Nearly all of Houston is "dirt cheap" when compared with San Francisco's price bubble.
As for crime, Houston is safer than SF proper and doesn't have San Francisco's vagrancy problems, which are as much a product of the city fathers as of the vagrants themselves.
Furthermore keep in mind the list price on a house in Houston isn't indicative of the true cost. There is a 3-5% property tax that is paid out annually. I currently pay $14,000/yr in property tax against a $320k mortgage. That's after homesteading discount and disputing the property value appraisal to be lower than what I actually paid for it.
How much income tax do you pay in Texas vs California?
California [1]:
1% on the first $7,850 of taxable income.
2% on taxable income between $7,851 and $18,610.
4% on taxable income between $18,611 and $29,372.
6% on taxable income between $29,373 and $40,773.
8% on taxable income between $40,774 and $51,530.
9.3% on taxable income between $51,531 and $263,222.
10.3% on taxable income between $263,223 and 315,866.
11.3% on taxable income between $315,867 and $526,443.
12.3% on taxable income of $526,444 and above.
Texas [2]: Texas residents pay no personal state income tax.
[1] http://www.bankrate.com/finance/taxes/state-taxes-california...
[2] http://www.bankrate.com/finance/taxes/state-taxes-texas.aspx
> There is a 3-5% property tax that is paid out annually. I currently pay $14,000/yr in property tax against a $320k mortgage.
Yes, that's high. However, consider what $320k gets you in SF vs Houston. With $320k I can get a decent sized house in Houston vs a tiny studio in SF (if that).
One state is not necessarily better than the other. They are making trade offs. These trade offs benefit you depending on your lifestyle and circumstances.