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, which examined IRS data from 2021, found that New York and California lost the most residents aged 26 to 35 with annual incomes of at least $200,000.
There are likely many reasons these folks are relocating, not the least of which is cheaper living. Because while pulling in $200,000 a year may sound impressive, it’s about what you do with that money that begets wealth. A study by PYMTS and Lending Club found that about one in four people in this income bracket are living paycheck to paycheck.
Florida and Texas, the top two states by net migration as identified by SmartAsset’s report, have no state income tax and generally lower home prices.
They’re also home to “newer tech hot spots like Austin and Miami,” Jaclyn DeJohn, SmartAsset’s managing editor of economic analysis, noted.
New Jersey, the lone northeastern state to experience a net migration in 2021 of at least 700 residents in this income and age bracket, “offers close proximity to the career, social and entertainment opportunities of New York City, with the potential to save money while living a suburban lifestyle: A best-of-both-worlds type situation,” DeJohn said.
In general, the pandemic sparked a radical rethinking of the work environment. As offices closed, companies turned to Zoom, Slack, and other methods of staying connected with their employees.
With the office in limbo, or, in some cases, eliminated entirely, people were able to rethink their living and working arrangements.
A report by the Brookings Institution said that while residential movement – a change of address within the same county – fell to its lowest rate since 1947 during the first two years of the pandemic, longer-distance movement across counties and states picked up.
Interestingly, it isn’t just those in the upper income brackets who are packing their bags and moving to cheaper locales. An earlier SmartAsset report found that millennials overall are heading to Texas cities including Austin and Dallas, as well as Jacksonville, Florida.
Here are the states where young professionals earning at least $200,000 have flocked.
Florida had a net gain of 2,175 high-earning tax filers between the ages of 26 and 35.
The median sale price of homes in Miami was $580,000 in July, up 10.5% from last year, according to Redfin, while the median home price in Orlando was $375,000 last month, up 0.5% from a year ago.
Texas saw more raw inflow of young, high-earning professionals than Florida, with 4,048 new filers in the given age bracket. But outflows were also higher, so net migration was 1,909.
The median sale price of homes in Austin was $572,000 in July, according to Redfin, down 10% since last year. The median sale price in Houston was $333,000 last month, up 0.9% since last year.
3. New Jersey
New Jersey welcomed 3,311 new tax filers earning at least $200,000 between the ages of 26 and 35, while 2,263 left, leading to net migration of 1,048.
The median sale price of homes in Newark was $435,000 last month, up 4.7% since last year, Redfin said.
In Colorado, as with Texas and New Jersey, people ages 26 to 35 make up a particularly high percentage of those earning over $200,000, coming in at 7%. After accounting for those who left the state, Colorado gained 754 tax filers in this age and income bracket.
The median sale price of homes in Denver was $587,000 last month, Redfin said, while the median price of a Colorado Springs home was $439,000, down 2.4% since the past year.
5. North Carolina
North Carolina saw net migration of 721 high-earning young professionals. Across all age ranges, the state had the third-highest net migration of high-income earners, according to SmartAsset.
The median sale price of homes in Charlotte was $420,000 last month, up 6.5% since last year, according to Redfin, while the median sale price in Fayetteville was $222,000, up 13.7% since last year.
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