With the perfect summer weather of the last two weekends, it is easy to enjoy all that is good about New Jersey. Along with wonderful amenities conducive to raising a family, New Jersey offers easy access to the wealth of business and cultural opportunities in New York City. Weekends can be spent at the shore and the educational system in many of our towns is second to none. The end result is that New Jersey continues to be an important destination that many people call home.
It may surprise you, however, to know that there are also many individuals that are choosing to leave New Jersey. To this point, I have always taken an interest in the United Van Lines Annual Migration Study, because it shows the states people are moving to and which states they are leaving. In the latest 2013 survey, New Jersey was ranked the top Outbound State. Last year, New York came in number 3 and Connecticut number 5 in the top Outbound List, so in fact, people are choosing to leave the tri-state area as a whole.
As a real estate broker, I talk with a lot of people that are either buying or selling homes in our area. I thought it might be interesting to share 5 reasons people are leaving New Jersey.
In a recent Zillow survey, it noted that the average annual property tax in the United States was $2823. In sharp contrast, in the listing of highest property taxes by county, our very own Essex County came in at $12,051, second only to Westchester, New York. As a percentage of the home’s value, New Jersey property taxes fare slightly better than our neighbor, New York state. However, the burden of high property taxes in some counties of New Jersey is significant.
New Jersey residents also pay higher state taxes relative to the rest of the country. In a recent article in 24/7 Wall Street, “States with the Highest (and Lowest) Taxes,” New York, New Jersey and Connecticut were cited as the three states with the highest tax burden, although not surprisingly all fell in the top five for per capita income as well. So, while people that live in New Jersey have high earnings capacity, they also pay more than 12% of their income in state and local taxes. There is a trade-off in that although there is a wealth of opportunities to earn money by living in New Jersey, there is also a punitive tax environment as well.
In the recent CNBC America’s Top States for Business survey, New Jersey came in 43 out of 50. The survey allocates points to each state based upon ten broad categories including areas such as infrastructure and transportation, quality of life, cost of living and access to capital. The South, Mid-Atlantic and Midwest states have better ratings than the East Coast in the area of business friendliness.
Cost of Living
New Jersey topped the list of most expensive states in the United States. The Commerce Department recently released data on the cost of living from 2008-2012 in 381 major metro areas. The second most expensive metro area as defined by the survey was New York-Newark-Jersey City, coming in slightly behind Urban Honolulu. Overall in the list of states, New Jersey was the third most expensive to live in behind Hawaii and New York. So, as I mentioned earlier, New Jersey residents must weigh the opportunity of robust earnings against the high cost of choosing to live here.
Kiplinger, a well-known personal finance magazine, ranks New Jersey as the fourth worst state for retirement in the United States. On reason is that New Jersey is one of two states that collects both an inheritance tax as well as an estate tax on the state level. Both of these taxes are in addition to any Federal tax burden. So, New Jersey has a burdensome financial environment for retirees as well.
These hurdles aside, New Jersey remains the most densely populated state in our country and has a long list of perks. For every home on the market, we still see multiple buyers looking to move into our coverage area. But in the meantime, if you are considering joining the outbound group and would like an opinion on the value of your home, contact firstname.lastname@example.org or call (973) 220-3050.