Pennsylvania, a state known for its rich history and economic opportunities, has been witnessing a significant trend of residents moving out. This phenomenon, often referred to as the great migration, has raised questions about the underlying reasons driving this exodus. The destinations vary, with cities like Washington D.C., Tampa, FL, Orlando, FL, Denver, CO, and Chicago, IL becoming popular choices for relocating Pennsylvanians.
Reasons for Leaving Pennsylvania
The top reasons for people moving out of Pennsylvania include retirements, job relocations, family reasons, the housing market, and college-related moves. Retirements account for a significant portion, with the state’s aging population influencing this trend.
Job relocations are also a major factor, as economic challenges have led to a scarcity of work prospects in Pennsylvania. The once-thriving manufacturing sector, for instance, has seen a severe decrease, impacting employment opportunities. Moreover, Pennsylvania’s high taxes and cost of living have made it less attractive, especially to younger demographics and families.
Economic Factors
The economic situation in Pennsylvania has been a contributing factor to why people are moving away from the state. In 2023, Pennsylvania showed a mixed picture of economic health. The state’s real Gross Domestic Product (GDP) growth was noteworthy at 5.6% in the 3rd quarter of 2023, surpassing the previous quarter’s growth of 2.3%. This growth was significantly higher than the U.S. overall, indicating some areas of economic strength.
Particularly, the retail trade sector experienced a remarkable growth rate of 24.4% per year. Additionally, Pennsylvania’s economy ranked 6th in size among states and Washington, D.C., with a real GDP of $974.9 billion in goods and services per year, contributing 3.5% to the U.S. economy. The unemployment rate in November 2023 stood at 3.4%, lower than the overall U.S. rate, suggesting a relatively healthy job market.
However, this positive outlook is countered by several challenges. Pennsylvania ranks 45th out of 50 states in economic recovery since the pandemic, based on CNN Business’s Back-to-Normal index. This index reflects a variety of economic indicators, including GDP, employment levels, and business confidence.
The state’s unemployment rate, though slightly improved, is still higher than pre-pandemic levels, with a significant impact on low-wage workers who continue to face recession-like conditions. Moreover, Pennsylvania experiences high inflation rates, with consumer prices rising 8.3% since August 2022. This inflation is impacting various sectors, from food and utilities to transportation services. Real hourly wages have not kept pace with inflation, leading to a decrease in real buying power for workers. The combination of these factors paints a picture of an economy with areas of growth but also significant challenges, particularly for lower-income groups and in the face of ongoing inflation.
Demographic Changes and Lifestyle Preferences
Demographic changes and lifestyle preferences in Pennsylvania have significantly influenced the state’s population dynamics, contributing to the reasons why people are moving away. Between 2021 and 2022, Pennsylvania, which is the fifth-most-populous state in the country, experienced a population loss of about 40,000 people. This decline is part of a broader trend in the Northeastern United States, where states are seeing population decreases, largely due to negative net domestic migration.
This means more people are moving out of these states than moving in. Despite an increase in births and international migration, the number of deaths, particularly due to the COVID-19 pandemic, offset these gains, leading to an overall population decrease. Pennsylvania also saw nearly 27,000 international immigrants added to its population, but this was not enough to make up for the approximately 40,000 people who left for other states.
The demographic trends in Pennsylvania are characterized by a significant shift in age distribution. From 2019 to 2022, there was a decrease in the population under age 25 and ages 25-54, while there was an increase in the population aged 65 or older. This shift towards an older population could impact economic growth, as it may lead to a tighter and more challenging labor market. Southeastern Pennsylvania, including Philadelphia and its suburbs, has seen substantial growth, adding more than 209,000 people in the last decade.
This region has become more influential in state politics due to its growing population and leftward political lean. At the same time, the Hispanic population in Pennsylvania grew by 45.8%, now making up 8.1% of the state’s population. This growth is spread across various regions, from the Lehigh Valley to agricultural areas like Lancaster County.
The changes in Pennsylvania’s demographic landscape, marked by population decline in some areas and growth in others, alongside the rising diversity, particularly among Hispanic communities, are reshaping the state’s economic and political landscape.
Taxation and Government Policies
In 2024, Pennsylvania is undergoing several changes in its taxation and government policies, which are influencing the reasons people choose to move out of the state. One of the significant changes is the reduction of the top marginal personal income tax rate from 8.99% in 2023 to 8.49% in 2024. While this indicates a decrease, Pennsylvania’s tax rate remains relatively high compared to some other states. In addition to income tax, the state has also introduced changes to property taxes.
Pennsylvania is providing increased property tax/rent rebate and increased income thresholds, which are forms of relief for personal/business property owners, homeowners, and renters. This move is seen as an effort to alleviate some of the financial burdens on residents, particularly those in vulnerable demographics.
Governor Josh Shapiro’s proposed $44.4 billion spending plan for Pennsylvania reflects these changes. His plan includes increased funding for schools and investments in economic development, along with community-based health and safety initiatives.
Key proposals include expanding the state Property Tax Rent Rebate Program, with the maximum rebate for seniors raised from $650 to $1,000 and an increase in the income cap for renters and homeowners to $45,000 a year. Shapiro’s budget aims to address rising prices by eliminating the state cell phone tax and expanding the property tax rebate program for seniors.
Furthermore, it seeks to help businesses by accelerating previously started tax cuts. These fiscal policies indicate the state’s efforts to manage economic challenges and provide relief to its residents, which can impact decisions on whether to stay in or move out of Pennsylvania.
Real Estate Market Dynamics
The real estate market dynamics in Pennsylvania in 2024 are characterized by a balanced environment, offering opportunities for both buyers and sellers, with varied implications across the state. In September 2023, home sales in Pennsylvania decreased by 18.4% year-over-year, with 10,698 homes sold compared to 13,107 in September 2022. This reduction in sales indicates a shift in the market dynamics.
The average months of supply for homes is around two months, suggesting that while the inventory isn’t as squeezed as in some other markets, there’s still a limited supply relative to demand. Median days on the market for homes have increased, which could imply a slight cooling down of the market.
Predictions for the Pennsylvania housing market in 2024 suggest that sellers who were hesitant in 2023 might return to the market. The real estate market is expected to balance out, providing benefits for both buyers and sellers. For buyers, this might mean more options and potentially greater negotiating power in terms of pricing.
Low mortgage rates are anticipated to create favorable conditions for buyers. On the other hand, sellers can benefit from sustained buyer demand despite the increased supply of homes. However, sellers might need to be competitive and flexible with pricing and terms to attract potential buyers in a balanced market.
Where Are Most People Moving From Pennsylvania
Washington D.C.
Moving to Washington D.C. in 2024 presents a unique blend of opportunities and challenges. The city is renowned for its extensive public transportation system, including the DC Metro, which offers both train and bus services. This robust network makes it possible to travel between any two stations with no more than one transfer, offering a convenient alternative to driving in a city known for its heavy traffic. For those who prefer biking, the Capital Bikeshare program offers flexible rental options, contributing to the city’s high walkability and bike-friendly environment.
However, living in Washington D.C. comes with a high cost. The average cost of living is around $65,000 per year per person, making it one of the most expensive places in the U.S. Housing and utilities are a significant part of this expense, with average costs of $11,355, and health care expenses are also high at $10,295. The median price for housing is close to $700,000, almost double the national average, and rental prices are steep as well, with an average of around $1,600 for a one-bedroom apartment. Additionally, Washington D.C. has a high tax rate of 8.95% on top of the federal tax rate.
Despite these costs, Washington D.C. offers various benefits to its residents. The city boasts top-ranked schools, abundant career opportunities, a rich tapestry of museums and cultural experiences, and a strategic location. It is a hub of political and social activity, with a diverse and dynamic population. For those considering a move, neighborhoods like Georgetown, Capitol Hill, Dupont Circle, and Logan Circle offer a mix of historical charm, vibrant nightlife, and excellent amenities.
Tampa, FL
Moving to Tampa, Florida, in 2024 offers a mix of affordable living, a strong job market, and a pleasant climate, making it an attractive destination for those relocating from Pennsylvania or elsewhere.
One of the key attractions of Tampa is its relatively lower cost of living compared to the national average. Housing expenses in Tampa are about 11% lower than the national average, which is a significant factor for those considering homeownership or renting. The absence of state income tax in Florida is another financial perk that can be appealing for new residents. However, it’s worth noting that utility prices in Tampa are about 18% above the national average, and transportation costs, including bus fares and gas prices, are also slightly higher, around 6% above the national average.
Orlando, FL
Orlando, Florida, presents a dynamic and evolving landscape with a population that has been growing steadily. As of 2021, the city had a population of approximately 309,000, showing a significant growth trend since the early 2000s. This growth is mirrored in the city’s economy, particularly in its employment sector. In February 2023, Florida reported a 2.75% increase in employment compared to the previous year, highlighting the state’s overall economic development. Furthermore, Orlando’s economy is diverse, extending beyond its well-known tourism and hospitality industries. The city has made strides in sectors like advanced manufacturing, aerospace, defense, and digital technology.
In terms of cost of living, Orlando displays a varied income distribution among its residents. The mean income for the lowest 20% of households is significantly lower compared to the highest 20%, indicating a notable disparity. This is further reflected in the Gini coefficient of 0.4996, suggesting moderate income inequality in the city.
For family households, the median income was around $69,657, whereas non-family households had a median income of about $54,133. These figures are important for individuals considering relocating from states like Pennsylvania, as they provide insight into the economic landscape and potential living standards in Orlando.
For those moving from Pennsylvania, Orlando offers a growing job market, diverse industries, and a vibrant cultural and recreational scene. Movers Pittsburgh state that most of the people that move there consider the cost of living when planning a relocation to ensure a smooth transition to life in Florida.
Denver, CO
Denver, Colorado, with its population of about 713,000, is a city that’s been seeing consistent growth and development. In 2021, the median household income in Denver was approximately $88,213, which is slightly less than the average for the Denver-Aurora-Lakewood Metro Area but comparable to the state average. This income level is a significant consideration for those moving from places like Pennsylvania, as it reflects the city’s economic status and the potential for earning. The per capita income in Denver stands at around $59,271, indicating a relatively prosperous economic climate.
Employment opportunities in Denver are also evolving, with a 0.51% growth in employment from 2020 to 2021. Key employment sectors include Professional, Scientific, & Technical Services, Health Care & Social Assistance, and Educational Services. For individuals relocating from Pennsylvania, Denver offers a variety of job options across these thriving sectors.
Additionally, the median earnings vary between industries, with some sectors like Finance & Insurance, Real Estate & Rental & Leasing, and Public Administration offering higher median earnings for men, and sectors like Agriculture, Forestry, Fishing & Hunting, Mining, Information, and Public Administration for women.
The cost of living, including housing, is an important aspect to consider. The median value of owner-occupied housing units in Denver is around $599,500, which is roughly in line with the metro area and higher than the state average. This, coupled with the city’s economic opportunities, educational institutions, and cultural diversity, makes Denver an attractive destination for those considering a move from states like Pennsylvania.
Chicago, IL
Chicago, Illinois, showcases a growing and dynamic economy, marked by a 1.45% increase in employment from 2020 to 2021. The city’s main employment sectors include Health Care & Social Assistance, Professional, Scientific, & Technical Services, and Educational Services. In terms of earnings, industries like Public Administration, Finance & Insurance, Real Estate & Rental & Leasing, and Information are among the top paying for both men and women.
For individuals considering moving from Pennsylvania to Chicago, it’s important to note the city’s median household income of $65,781 in 2021 and its robust educational sector, with major universities like the University of Illinois Chicago and the University of Chicago. The city’s diverse economy, cultural vibrancy, and educational opportunities make it an attractive destination, though the cost of living and housing should be considered in the decision-making process.