An analysis of 2021 tax data shows even high-earning millennials are increasingly attracted to low-cost locales. Where are they going? Florida tops the list.
CONYERS, Ga. – They’re young, they’ve got money, and they’re on the move.
A recent analysis by SmartAsset found that New York and California lost the most residents aged 26 to 35 with annual incomes of at least $200,000, according to IRS data from 2021.
There could be various reasons why these individuals are moving, one of which could be the cost of living. Earning $200,000 annually may seem impressive, yet financial prosperity depends on how one manages their earnings. A study conducted by PYMTS and Lending Club indicates that a quarter of individuals in this income bracket live paycheck to paycheck.
Smart Asset’s report identifies Florida and Texas, the top two states by net migration, as having no state income tax and generally lower home prices.
According to Jaclyn DeJohn, Smart Asset’s managing editor of economic analysis, these cities are also home to newer tech hotspots such as Austin and Miami.
According to recent statistics, New Jersey was the only state in the Northeast to experience a net migration of at least 700 residents in 2021, within a specific income and age bracket. As per DeJohn, the state offers a unique opportunity to live in the suburbs while having close proximity to the career, social, and entertainment opportunities of New York City. This allows residents to enjoy a best-of-both-worlds type situation, where they can save money and still have access to the city’s amenities.
In response to the pandemic, companies turned to virtual communication tools like Zoom and Slack as office closures forced a radical rethinking of the work environment.
People were able to reconsider their living and working arrangements with the office in limbo or eliminated.
According to a report by the Brookings Institution, the pandemic caused a decrease in residential movement within the same county to its lowest rate since 1947 during the first two years of the outbreak. However, there was an increase in longer-distance movement across counties and states.
It’s worth noting that it’s not just wealthy individuals who are relocating to more affordable areas. According to a previous study by SmartAsset, millennials in general are migrating to cities in Texas, such as Austin and Dallas, as well as Jacksonville, Florida.
These are the states that have seen an influx of young professionals who earn a minimum of $200,000.
1. Florida
2. Texas
3. New Jersey
In the state of New Jersey, a total of 3,311 new tax filers with an annual income of at least $200,000, between the ages of 26 and 35, were welcomed, whereas 2,263 people in the same category left the state. This ultimately led to a net migration of 1,048 individuals.
According to Redfin, the median sale price of homes in Newark, New Jersey was $435,000 last month, which is a 4.7% increase from the previous year.
4. Colorado
In Colorado, Texas, and New Jersey, people aged between 26 to 35 constitute a higher percentage of individuals earning over $200,000, which is around 7%. After considering those who left Colorado, the state gained a total of 754 tax filers in this age and income bracket.
According to Redfin, the median sale price of homes in Denver last month was $587,000. Similarly, the median price of a home in Colorado Springs was $439,000, which is down by 2.4% since the past year.
5. North Carolina
According to a report by SmartAsset, North Carolina experienced a net migration of 721 young professionals with high income. The state ranked third in the country for net migration of high earners across all age groups. In Charlotte, the median sale price of homes increased by 6.5% to $420,000 last month, compared to the previous year, while in Fayetteville, the median sale price of homes increased by 13.7% to $222,000, compared to the previous year.
