When the coronavirus shut down New York City, the number of real estate sales dropped by 54 percent and the median price fell to “a mere” $1 million. So, if you want to buy a home on, say, Manhattan Island, plan on shelling out around $1,550,000. Want to sell? Well, the price drops to $945,500.
Of course, any outsider who has ever visited the Big Apple knows that just about everything in New York City is expensive. Looking for an apartment? The average price is quickly approaching $4,000 a month. That’s before utilities, association fees, etc., kick in. And it’s all driven by limited space and high demand.
So, people are leaving. According to this Fox Business News Article, New York City relocations are “accelerating at a ‘substantial’ pace.” New York moving companies report the volume of moving business this summer has increased to a degree where they can’t keep up with the demand.
NYC refugees are heading mainly for Florida, California, Texas, and North Carolina. And they are leaving at a rate of 270 a day.
The reasons for the exodus? Well, of course there was the pandemic, and New York City was ground zero of the first national outbreak. Now that the pandemic is mostly under control, New York politicians are trying to figure out how to lure people back. Governor Andrew Cuomo said it succinctly, “We’re trying to get people to come back. They’re not coming back right now.”
Then there are the high taxes. Besides the high cost of living and fears of a second corona virus surge, New York State has one of the highest income tax rates in the nation. That is on top of the 8.95% New York City sales taxes, of which the state takes its 4% cut.
In the days before the Trump Administration’s 2017 Tax Act, deductions for state and local taxes were unlimited. Those deductions included everything from state to local sales taxes. The 2017 bill capped that deduction to $10,000, creating a big problem for high tax states like New York, especially for wealthy tax payers.
Governor Cuomo recognized how the exodus is also emptying state tax coffers. He blamed his state budget shortfalls on the state of Florida. New Yorkers, he said, are heading south to keep more of what they earn.
The migration is not only from the New York metropolitan area. One million residents have abandoned New York City and the surrounding tri-state area — New Jersey, Connecticut and Long island — during the past nine years at a rate of about 300 people a day.
The trend is not exclusive to the northeast. According to Jack Kelly, writing for Forbes Magazine, “Many similar regions are seeing their residents migrate to other states. Los Angeles, Chicago, Washington, D.C., and San Francisco, as well as Connecticut’s Hartford, Bridgeport and New Haven, have all experienced a substantial exodus of people.”
So, as our big cities tax more while their infrastructure crumbles and city officials struggle with homelessness, “peaceful” protests that quickly deteriorate to rioting, along with a rising crime rate, people will likely continue to vote with their feet and head for anywhere that’s not New York City.
