People from New York who recently moved to Florida and Texas to save on taxes are realizing that the savings are not as much as they would have been four years ago, because the cost of renting or buying a home has gone up a lot.
Rents and home prices in Miami have increased by approximately 40% since the pandemic. This increase was due to many people leaving New York City and moving to Florida, as well as to Dallas and Austin in Texas. This information comes from a study conducted by financial information provider SmartAsset.
The study found that New Yorkers who earned $250,000 and moved to Miami last year ended up saving $88,036, which is 28% less compared to people in the same income bracket who moved to South Florida in 2019. According to the data, first reported by Bloomberg News, the early settlers had saved $122,956 in comparison.
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According to SmartAsset, the two cities in Texas that have experienced a significant increase in population are no longer as affordable as they used to be. If a person from New York who earned $250,000 moved to Austin in 2019, they would have saved $154,564. Last year, the number decreased by 25% to $116,195.
People from New York who moved to Dallas in 2019 and had the same income level saved $135,887. Last year, the amount of money saved decreased by 20% to $108,208. The data also shows that the cost of living is increasing faster in Miami, Austin, and Dallas compared to Manhattan.
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Between 2019 and 2023, the cost of renting in Manhattan went up by 3.3%, while the prices of homes increased by 29.3%. Currently, the price of energy and utilities has decreased by 13.7%, but the cost of gas has increased by 35.7%. In Miami, the cost of renting has increased by 37% during that time, while the prices of homes have gone up by 43.7%, according to SmartAsset. During a period of four years, the cost of energy and utilities in Miami increased by 17%, while the price of gasoline went up by 54.4%.
The cost of renting in Austin has increased by 25.5%, while the price of homes has risen by a significant 55.6%. The cost of energy and utilities has increased by 12.5%, and gas prices have gone up by 32.3%. In Dallas, the cost of renting a home has decreased by 1.1%, while the prices of homes for sale have increased by 21.1%. The cost of energy and utilities has gone up by 16.5%, and the price of gas has increased by 32.8%.
According to a study by TurboTax, in 2023, New York State had the third highest income tax rate in the country. Florida and Texas are two of the nine states that do not collect a state income tax. The increasing demand for real estate has caused home prices to rise significantly in the Lone Star State. As a result, the property tax rate has also increased, which is putting financial pressure on long-time residents. Meanwhile, Florida is currently experiencing a property insurance crisis. Residents had to pay a significant 42% more for coverage last year compared to 2022.
Last year, people in Florida paid an average of $6,000 for home insurance, which is almost three times the national average of $1,700. “This is a new normal,” said Michael Martirena, a luxury real estate adviser with Miami-based firm Compass, explaining that people are still accepting higher costs of food, nightlife, culture, and real estate.
Cities in the Sun Belt have seen an increase in population as people move away from expensive cities like New York, Chicago, and Los Angeles.
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