A rising tide of affluent consumers are loading moving vans and leaving their cities in this post-pandemic era, mostly due to high taxes and even higher costs of living, according to several recent studies.
Florida and Texas are especially popular destinations that they are flocking to, according to a SmartAsset report.
While the trend is growing, it is not new, according to Bob Chitrathorn, vice president of wealth planning at Simplified Wealth Management in Corona, California.
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“People have been moving for a few years now, and the fact that most aren't moving back makes others think that it is very doable and could be very beneficial,” he said. “Since 2020, people have been more comfortable dealing with a little change because in 2020, they dealt with a lot and adapted.”
That is borne out in statistics from the U.S. Census Bureau showing that, overall, 27.3 million people in the U.S. moved last year, a 4% increase from 2021.
An increasing number of them are also heading across state lines, according to a 2022 moving trends study by Higher a Helper, a relocation services company. Just 59% of U.S. movers made local moves last year, the study showed.
“In fact, both 'moves to a different county within the same state’ (24%) and 'moves crossing state lines’ (17%) were at their highest levels since the start of the millennium,” Higher a Helper reported.
California, New York exit signs
To identify the rising number of affluent Americans in migration mode, the SmartAsset study tracked moving patterns of U.S. adults who earned $200,000 or more between 2020 and 2021.
The study’s findings showed the nation’s two largest Southern states – Florida and Texas – picked up the highest earners. Florida raked in the highest earners, gaining 27,500 in-bound movers during the study’s timeline. Texas clocked in at second place, welcoming 9,000 new wealthy residents.
Conversely, and as Kiplniger reported with regard to similar tax migration data, California and New York saw the most affluent residents fleeing, with a loss of more than 45,000 and 31,000 residents, respectively, according to the study.
Massachusetts, New York and Pennsylvania lost high earners year over year. Even so, Massachusetts, New Jersey and Connecticut are the only states with more than 10% of tax filers earning more than $200,000 annually, the study showed.
Seven Southern states claim the largest influx of wealthy residents based on the percentage of population: Florida, North Carolina, South Carolina, Tennessee, Georgia, Alabama and Arkansas.
Meanwhile, high earners are leaving the nation’s capitol at a faster rate than those in any other state, Smart Asset reported. Washington, D.C. lost a net total of 2,009 high-earning households.
Chitrathorn says his clients and co-workers are mainly moving to Texas, Florida, Tennessee, and Nevada.
“The ones I see moving to Nevada are those from California who have family in California and still want to be close,” he said. “Texas and Florida have no state income tax, and Tennessee has a more favorable income tax than most.”
One benefit for states that are seeing higher affluent households buy homes in their locales is that the newcomers tend to bring other higher-income people along for the ride.
“Lower taxes also attract businesses,” Chitrathorn says. “More business moving can cause employees to move with them.”
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