Cost of living + Taxes = New Migration Patterns

Hoboken?  Hmmm, maybe Houston perhaps...Hey folks, gather around and let me spill some real estate beans that caught my attention recently. I stumbled upon a couple of articles from The New York Times that I believe are game-changers for future property prices. Now, I'll give you the juiciest bits from each article and then dive into why this will have a massive impact on the real estate scene. So buckle up and get ready for some serious insights!

First up, we have "The Greatest Wealth Transfer in History is Here, With Familiar (Rich) Winners." Picture this: back in 1989, the total wealth of American families stood at a modest $38 trillion. Fast forward to today, and that number has skyrocketed to a staggering $140 trillion. What's even more mind-blowing is that a whopping $84 trillion of that wealth will be inherited by the year 2045. Can you imagine the kind of moolah we're talking about here?

But that's not all, folks. The second article, titled "Coastal Cities Priced Out Low-Wage Workers. Now College Graduates Are Leaving, Too," paints a picture of coastal cities losing their grip on intellectual talent. It turns out that these once-thriving hubs of brainpower are now witnessing a mass exodus of college graduates. And guess who's reaping the benefits? Cities like Dallas, Houston, Austin, Raleigh, and Orlando are becoming hotspots for these eager young minds. It's a migration frenzy, and the coastal cities, particularly NYC, are taking the brunt of it. Talk about a major shift in the real estate landscape...but hey, just keep raising them taxes...(we'll discuss more on this in tomorrow's post).

Now, let me connect the dots and share this take on this real estate extravaganza. Living in the NYC metro area, I often find myself scratching my head and wondering how the heck people can afford the homes they're buying. Seriously, I saw a house in Bloomfield recently sell for a mind-boggling $300,000 over the asking price.  As a real estate agent, I've noticed a trend: many buyers these days are getting a hefty chunk of change from their dear old parents to fund their home purchases. Hey, there's nothing wrong with that—someday, I hope to do the same for my own kiddos. But here's the kicker: not everyone is fortunate enough to receive parental assistance for down payments. And guess what they're doing? They're packing their bags and heading south. This data I stumbled upon simply confirms what I've been suspecting all along.

Let me hit you with a perfect example: Aceland Mortgage shared some stats that blew my mind. In Ridgewood, the average price per square foot for a home is a jaw-dropping $488. That means if you want a cozy 3,000 square foot pad, you'll be shelling out a staggering $1,464,000. Oh, and don't forget about those property taxes, hovering around a cool $25,000 per year. But hold on to your hats because I've got a secret to share. In a lovely suburban area near Houston you can snag a 20-year-old 3,000 square foot gem for just $450,000. And the cherry on top? The property taxes are a mere $8,000 per year. Here in NJ we're somehow weirdly programmed to think paying $10,000+ a year in property taxes is OK or normal (It's not. Write to your representatives and tell them to wake up).

So, what's the deal with all this wealth transfer and inheritance coming our way? Are folks using their retirement funds and inherited riches to buy second homes? Or are they finally fulfilling their dreams of owning their own palatial residences? And for those "have nots," are they simply saying, "Screw it, I don't need to struggle here. I'm outta here, off to the south where life is grand and affordable!" It seems like we've reached a point where society is divided between the haves and the have nots, and boy, are the Sun Belt markets in for a wild ride. Picture Raleigh, Atlanta, Savannah, Charleston, Greenville SC, Orlando, Tampa, Houston, Austin, Dallas, Nashville—all these cities are poised to reap the benefits. They're importing college grads, boasting solid infrastructure, offering diverse employment opportunities, and, let's not forget, have some pretty awesome walkable areas. It's a win-win situation for everyone involved-except the blue Northeastern states they are leaving behind.

So there you have it, my friends. The real estate game is about to undergo a massive transformation, thanks to the largest transfer  of wealth in history and the shifting migration patterns of college grads. It's time to strap on your seatbelts and ride this wave of change because the Sun Belt markets are about to shine brighter than ever.