The hot topic making rounds is the mass exodus of residents in blue states. California and New York have been the most affected states, losing over half a million residents. Some main reasons driving away residents are high state taxes, an increased cost of living, and a rise in crime.
On the other hand, Texas and Florida are the primary beneficiaries as they have gained a significant share of relocated residents, according to data from the U.S census bureau. Data on contracts from moving companies show that more people are moving away from coastal cities.
According to the National Association of Realtors, there has been a boom in real estate away from California and New York. More people are moving from the major metropolitan areas and are settling in the rural, suburban areas. The pandemic did not help this move in any case, as more people are working at home and choosing to do it away from the big cities.
One of the areas that have benefited from this shift is Williamson County, a suburban area just outside of Austin, Texas, which has gained the most residents during the pandemic. This trend is expected to continue over the next few months as more people seek new residence away from New York and California.
The movement of human capital away from major cities significantly impacts a state’s economy. The skilled personnel moving from an essential position can cause a reduction in economic development. Migration from these states also affects their tax bases and net fiscal contribution, ultimately affecting their property values.
California and New York rank as some of the most expensive states to live in. The median asking price for a home in these is close to a million. Less than a quarter of residents in these states can afford a home in those areas.
Though other states outside the two have a lower salary rate, their housing costs are also lower, creating an affordable cost of living. From remote job opportunities to high living costs and taxes, there are numerous reasons for a mass exodus from New York and California. Regardless of their personal motivation, this trend stands to make a huge impact on the impacted areas.
