Domestic migration: A tale of what happens when your state becomes too expensive.

This is an older story from January featured on Mint.com.
http://www.mint.com/blog/trends/mint-map-moving-for-money/

 Perhaps more than anything it illustrates what happens when the place you live in becomes too expensive. Before we continue further, here is a graphic showing more recent migration trends:

As you can see, there's a very distinct migration pattern going on here. The bottom line is that the 'classic' coastal states are losing domestic population at an accelerated, dramatic rate. These states all share the same things in common: They are expensive, have high housing prices, high taxes, and in many cases strict anti-development clauses in effect throughout their communities. What's more is that by having a limited housing supply such as the case in California and New York, home prices have still not fallen to acceptably low levels- especially not for first time home buyers and the middle class. In an economy like this where the job market is sour and wages are flat there suddenly exists even less incentive for prospective home buyers to stay.

 The result are that California lost 680,000 domestic residents, New York lost 640,000,  and the states of MA and NJ each lost 100,000-200,000. But what's even more apparent is that you can tell quite easily where people are moving to: The Southeast. TX, NC, TN, GA,SC, and even FL where all major gainers. These states- like those who lost share similarities with the exception that their common attributes are generally positive: Affordable housing, lower taxes, growing job markets, and better infrastructure.

 Now, as a native Southerner my own perspective is that for a long time most people in states like CA and NY had zero interest in the South. The region has a somewhat checkered past. The weather is far from ideal especially compared to California ( our humid, hot summers are legendary) The region also suffered from a stagnate economy for decades. But at the same time as states like California, New York, MA, and others boomed they also became more expensive. We have reached a pain point in terms of disparity in costs between places like the Southeast and the two coasts. Simply put, people aren't stupid and if they live in one area that has starter homes costing $450,000-$500,000 versus the typical $150,000 or less equivalent in the Southeast, people will begin to seek out better opportunities.

 Texas has by far been perhaps the biggest winner in terms of growth for the past several years. All of its major cities such as Dallas, Houston, Forth Worth, Austin, and others have all had major gains in population. The same reasons apply: Affordable housing, growing job prospects, and better infrastructure.

http://money.cnn.com/2009/12/23/real_estate/fastest_growing_states/index.htm?postversion=2010010511

 Unless states like California can somehow get their housing market under control and back to a level that real incomes can afford ( namely in changing the way Proposition 13 works) expect this trend to continue.