California vs. Texas

[Jason Mak]

Starting this thread after reading through the "Austin is Hot" thread.  After reading that thread, the Austin atmosphere looks similar to California.  I'm a California investor and certainly a dearth of deals out there due to high prices and influx of investor competition.  So my question is if this is any different from Texas?  I'm referring to the metro cities: Dallas, Austin, Houston 

Texas and California share many similarities from an investor profile:

- Growing populations and good demographics

- Nice metropolitan cities with strong industries

My general observation is that the cost of entry (i.e. price per square feet) is much lower in Texas, so it would make sense if you have less capital to go there, but does it make sense from an ROI point of view?

I've seen both sides of the argument.  I have friends exchanging buildings in CA and buying apartments for nicer cap rates in Houston but then also friends who have comment that TX doesn't have the appreciation that CA does. 

Anyone have experience in both states and care to comment?  I'm referring mainly towards the larger Metro areas (i.e. Austin and SF or Dallas and LA)