The world, as we all know, has been very chaotic this year. Current events are forcing drastic changes in everyone’s life. Entire industries spanning the globe have been decimated or else given a new opportunity to rise. Once-bustling cities have become like ghost towns amidst quarantines and lockdowns, and whole economies have crashed, as governments frantically patch holes through quantitative easing and reducing interest rates. On top of this, in the United States, there has been a massive surge in urban crime amidst the long hot summer after George Floyd’s death.
Because of all this, many people in urban areas in America, a country with huge open spaces, are looking for the exits. In New York City alone, 420000 people, or 5% of the population, left the city between March and May, most of them wealthy and many to the Hamptons. Many neighborhoods in the Upper East Side have been depopulated by as much as 40%. This shift is likely to be permanent for many people from higher-tax states, as their jobs become remote and they do not need to live in expensive metro areas for work anymore. These high-tax states do not take this well, as the loss of their high earners means the loss of most of their income. California has gotten so desperate for money that they imposed an exit tax upon billionaires who left up to 10 years ago.
Where are they moving instead? Low-tax regions are getting hit by a tide of migrants. People from California are moving to places like Idaho and Wyoming, East Coasters are moving to Florida. This results in higher demand for real estate in those areas, hence higher prices. More locally, people are leaving high-crime cities where much of the unrest has been going on and moving to suburbs with more robust anti-crime measures. Because of this, it is reasonable to expect prices for suburban real estate to rise. Finally, it is important to emphasize that for now, it is primarily wealthier people leaving, who have the ability to buy properties of their own in other areas. Poorer people tend to be the ones stuck in “essential” jobs that are still in-person.
To conclude, there is a massive exodus underway from American cities, especially of the wealthiest and most influential people. It remains to be seen how large it will be, or how permanent, but it is very real and has the potential to reshape the demographics of locales around the country.