The Great Migration: The Top 10 State-to-State Moves and How it Affects Commercial Real Estate Values

Data from the U.S. Census reports that 8 million Americans moved in 2022, with 24 States Seeing Population Growth, 15 States Stayed the Same, and 11 States Declined in Population. The states that experienced population decline were due to factors such as job opportunities, cost of living, taxes, climate, and crime & homelessness issues. The states with the highest number of people moving out the past few years include:

  • California817,669 residents moved out of the state in 2022 | 75,423 in 2023
  • New York – 550,000 moved out – The state saw 62% of moves being outbound in 2022 | 101,984 in 2023
  • New Jersey – 67% of moves being outbound in 2022, with high taxes and cost of living being major factors
  • Illinois – 67% of moves being outbound in 2022. Illinois has been witnessing a significant population decline for years.
  • Pennsylvania – 318,000 people moved out from Jan. 2021-Feb 2022

Why and where are they moving to?

According to the annual United Van Lines National Movers study people cited the following top 5 reasons for moving:

  • High Cost of Living: In states like New York, Connecticut, and California, the cost of living is among the highest in the country, prompting many to seek more affordable alternatives.
  • Taxes: High state taxes are a major factor for people leaving their state. This seems to be a significant issue in states like Illinois.
  • Housing Crisis: The housing crisis in some states, such as California, has led to increased homelessness and unaffordability, pushing residents to move to other states.
  • Job Market: Employment opportunities or lack thereof can significantly influence people’s decision to move. The job market in some states may not be as robust or may not offer the type of jobs that residents are seeking.
  • Retirement: Many people choose to move to a different state for retirement. For example, 32% of those who left New Jersey cited retirement as the reason.

“Americans are moving from expensive cities to lower-density, more affordable regions."

~ Eily Cummings, United Van Lines vice president of Corporate Communications

According to the US Census Bureau and the National Association of Realtors, here are the top states that people are moving to:

  • Florida: Florida is noted as the state with the most net migration, with a significant number of Americans moving in.
  • Texas: Texas ranks second in attracting new residents.
  • North Carolina: North Carolina is also popular among people relocating, coming in third place.
  • South Carolina: South Carolina is fourth on the list, welcoming a good number of new residents. 
  • Georgia: Finally, Georgia rounds out the top 5 states that people are moving into.

So how does this migration affect investors and commercial real estate values?

Mass migration significantly impacts the value of commercial real estate in both the states people are leaving and the ones they are moving into.

In states experiencing out-migration, commercial real estate values may decline. The exodus can lead to decreased demand for commercial spaces like office buildings, retail stores, and restaurants. This reduced demand can result in lower rental incomes and potentially lower property values. 

On the flip side, in-migration states can see a positive impact on their commercial real estate market. As population increases, so does the demand for goods and services, leading to an increased need for commercial spaces. This heightened demand can drive up rental rates and, consequently, the value of commercial properties. 

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