From the Wall Street Journal:
The Realignment of America
By MICHAEL BARONE
May 8, 2007; Page A19
In 1950, when I was in kindergarten in Detroit, the city had a population of (rounded off) 1,850,000. Today the latest census estimate for Detroit is 886,000, less than half as many. In 1950, the population of the U.S. was 150 million. Today the latest census estimate for the nation is 301 million, more than twice as many. People in America move around. But not just randomly.
It has become a commonplace to say that population has been flowing from the Snow Belt to the Sun Belt, from an industrially ailing East and Midwest to an economically vibrant West and South. But the actual picture of recent growth, as measured by the 2000 Census and the census estimates for 2006, is more complicated. Recently I looked at the census estimates for 50 metropolitan areas with more than one million people in 2006, where 54% of Americans live. (I cheated a bit on definitions, adding Durham to Raleigh and combining San Francisco and San Jose.) What I found is that you can separate them into four different categories, with different degrees and different sources of population growth or decline. And I found some interesting surprises.
Start with the Coastal Megalopolises: New York, Los Angeles, San Francisco, San Diego, Chicago (on the coast of Lake Michigan), Miami, Washington and Boston. Here is a pattern you don’t find in other big cities: Americans moving out and immigrants moving in, in very large numbers, with low overall population growth. Los Angeles, defined by the Census Bureau as Los Angeles and Orange Counties, had a domestic outflow of 6% of 2000 population in six years — balanced by an immigrant inflow of 6%. The numbers are the same for these eight metro areas as a whole.
There are some variations. New York had a domestic outflow of 8% and an immigrant inflow of 6%; San Francisco a whopping domestic outflow of 10% (the bursting of the tech bubble hurt) and an immigrant inflow of 7%. Miami and Washington had domestic outflows of only 2%, overshadowed by immigrant inflows of 8% and 5%, respectively.
This is something few would have predicted 20 years ago. Americans are now moving out of, not into, coastal California and South Florida, and in very large numbers they’re moving out of our largest metro areas. They’re fleeing hip Boston and San Francisco, and after eight decades of moving to Washington they’re moving out. The domestic outflow from these metro areas is 3.9 million people, 650,000 a year. High housing costs, high taxes, a distaste in some cases for the burgeoning immigrant populations — these are driving many Americans elsewhere.
The result is that these Coastal Megalopolises are increasingly a two-tiered society, with large affluent populations happily contemplating (at least until recently) their rapidly rising housing values, and a large, mostly immigrant working class working at low wages and struggling to move up the economic ladder. The economic divide in New York and Los Angeles is starting to look like the economic divide in Mexico City and São Paulo.
…
The bad news for them is that the Coastal Megalopolises grew only 4% in 2000-2006, while the nation grew 6%. Coastal Megalopolitan states — New York, New Jersey, Massachusetts, Illinois — are projected to lose five House seats in the 2010 Census, while California, which has gained seats in every census since it was admitted to the Union in 1850, is projected to pick up none.
High housing costs, high taxes, a distaste in some cases for the burgeoning immigrant populations — these are driving many Americans elsewhere.
I live in central jersey and have to admit we’re getting tired of going out and being the only ones speaking in English.
Found out this morning that a close friend of the family moved out to NC. He jumped when his company asked him if he was interested in relocating.
jb
I think many fall into one of two categories here in NJ. First is that your life is inextricably linked to Manhattan for either work or play and you couldn’t see yourself not being able to go into the big apple on a regular basis. Second would be just the typical suburban dweller that maybe goes into the city once or twice a year. If you fall into the second category, you wouldn’t miss this place one bit by moving elsewhere. Chances are, your quality of life will be better than it is here. We were just down in Atlanta over Easter and are gradually coming to the conclusion that we’re eventually going to move down there, or maybe NC. I could get a good job in Charlotte in two seconds flat, but am limiting my options to Raleigh or Atlanta areas for now
“The result is that these Coastal Megalopolises are increasingly a two-tiered society”
Another comparison to the 1920’s.
x-underwriter – I’m sure immigrants are tired of hearing “Americans” complain about how costs are so high. Go out and earn your slice of America. That is how America works. It wouldn’t be one of the more democratic and capitalistic societies if that wasn’t the case. If you think about what has driven the growth of America for the last 230 years it has been the influx of immigrants. Compare that to once economic powerhouses England, France, Spain and Japan. All had there moments of growth, but stagnated. Closed minds, closed doors and stagnant economies. I’m 2nd generation and still have an instilled work ethic that drives me to go out and work hard for a slice of the American dream. My parents and aunts and uncles are all multi millionaires because they worked hard. The global economy is at our doorsteps and I think it is a great thing. Spanish enclaves where you can get authentic empanadas. Asian food stores where you can pick up hoisin sauce. Middle Eastern neighborhoods to pick up some hummus.
You’re attitude borders on xenophobia and fires the flames of racism. Embrace diversity, it’s the past, present and future of America.
I’m second generation too. My parents came here from europe in the 50’s. We have many american success stories in the family. They were required to assimilate into the american culture. A country where half the residents don’t know how to speak to the other half is, in my opinion, a divided country.
x-underwriter: The only reason why I live in NJ is its diversity. I don’t want to raise my kids in a society dominated by one race and have that close mind.
I think the population demographic in NJ (with larger Immigrant base) is going to actually favour RE prices go down further. Sure you will have ultra rich who will buy McMansions, but vast majority of Immigrants aren’t going to be buying $500K POS. They are very conservative and not everyone makes $150K+. The affordability issues will force many to either leave costly areas and prices will have to come down.
Seems like many of us here are the children of immigrants, myself included.
There has always been a little bit of an argument about what consititutes first or second generation. I consider myself a 1st generation American, since I was of the first generation born here (parents were naturalized).
jb
x-underwriter: I am from India, there are 26 major languages and may be 1000+ dialects. The country is not divided, but the diversity makes it exciting. The country gets more united every year. While growing up, I used to be excited to go even other state, because it was like visiting other country – different food, language, culture etc… My biggest disappointment in US was McDonalds in every town in America.
So there was an outflow of 8% and an inflow of 6% for the NY Metro area? Sounds just the opposite of what all the NYC RE bulls would have you believe.
JB – Saying your 2nd generation takes away from your parents that they are Americans as well. They worked hard for that right. That’s of course if they still live in the US.
x-u – Assimilation is easier for some than others, due to derivation of languages. I’d argue that Europeans have a much easier time learning the language than anyone from the Middle East or Asia. Just because one chooses to speak their native tongue to dear friends should not be frowned upon. How do you know they don’t speak English fluently. I speak four languages and choose to speak to those in the language they are most comfortable.
You want homogeneity? There was a guy in Germany once with unique facial hair trim that wanted to establish such a place. See what history thinks of his ideas…
x-underwriter,
Curious why you are ruling out Charlotte for now? I have never been there, but I hear good things. Just curious?
Last fall my wife and I checked out Raleigh and I think it’s a real possibility we might move there.
She really wants to give NJ a shot, but it depends on how things go. Over the next 12 – 18 months, we would need to see significant declines in home prices and at least some indication that property taxes will at least be stabilizing (goals we first set about a year ago).
As time marches on, I’m getting to think this is less ands less realistic.
Of course, we are getting a lot of family pressure to stay, especially with the new baby. They don’t really understand the dynamics because they are long time owners. “It was tough when we bought too…just bring your lunch to work to save money”.
My wife’s family is really laying on the guilt. Which is interesting, because they are immigrants who came to NJ to make a better life. You think they would understand.
#12 rentinnj: The pricing issue will not be an issue for you over the next 12 to 18 months, as prices are falling. The taxes however is another story, I do not see any hope there at all.
So there was an outflow of 8% and an inflow of 6% for the NY Metro area?
Natural growth (births minus deaths) made up the gap and even added a few people, giving NJ a paltry 0.2% population growth last year (versus 1% for the US). This allowed the bulls to technically argue that the “population is growing”.
So, we are relying on babies and first generation immigrants support the housing market.
The pricing issue will not be an issue for you over the next 12 to 18 months, as prices are falling. The taxes however is another story, I do not see any hope there at all.
I agree. Most of the houses we have looked at so far have not had terrible taxes because most of the homes in our price range right now are POS’s.
As it now looks like prices are falling, we were looking at houses about 20% higher than our price range, figuring they could hypothetically fall into our range in the next 18 months or so.
So, after a 20% drop we can afford a decent (nothing spectacular, middle class) house, but now we start getting into much bigger property tax bills. You can’t win.
RentinginNJ Says:
Curious why you are ruling out Charlotte for now?
My thoughts are that it might have a little ways to go before it’s considered a truly international class city. But then again, I’ve never been there so I don’t know for sure. Due to all the banks there, it’s a town full of bankers and not much else. I think my long term career goal is to get out of mortgages/real estate and banking completely. I’m just tired of the topic.
I was also visiting Anderson, SC which is just outside Greenville. Nice place but it wasn’t my cup of tea. It would be a huge culture shock to move there.
Everybody is scared to make a huge move somewhere else. I think the hardest part is just making the decision to do it but the rest is easy. I’ve seen enough postings on this board and others where people say “I should have moved out ten years ago”. The biggest issue, as always, is leaving your existing social network and facing the task of rebuilding that from scratch. In my experience, it’s real easy to do that in a town where everyone there just moved in from somewhere else and not so easy where the population is stable without a lot of migration in.
I love certain parts of NJ and would certainly miss Manhattan but reading this board for the last year and a half has made me realize some truths about the place. As Yogi Berra once said , “The future aint what it used to be”
Then again, maybe I’m just turning overly pessimistic by signing in here every day.
How is this different from any other time in US history?
Remember the Lower East Side tenements? (Where my family were in 1900, 12 kids and parents in one room).
Remember Hoboken Italians?
Remember the Portugese community in Newark?
The Germans in Chicago moved on in disgust when the Irish moved in. And that was a loooong time ago.
It is a fairly clear and basic pattern – immigrants come, live in coastal cities and urban areas in high concentrations and poor conditions and work their way up. Their children gravitate to the “white picket fence’ in the suburbs.
lisoosh, amen to that.
NYC’s population hasn’t really increased much in 20 years… it just ‘replenishes’ the talented pool with hard working/motivated people (generally).
#17
i think one difference is that in the past people came legally – now, not as much.
x-underwriter I think a lot of people talk in their native tongue more when they have kids to make their kids learn the language. My husband and I usually talk in english but ever since my son was born, we try to talk as much as we can in our native tongue. That’s only way we make him learn our language. We know that he’ll get fluent once he goes to school. I am from India and even though we have lot of friends from India, each one is from a different state and talks a different language. So talking to him at home in our language is the only way to make sure that he atleast knows to converse and understand our language.
t c m Says:
i think one difference is that in the past people came legally – now, not as much.
I think it was a lot easier to come into this country legally 40 years ago than it is today. Getting a green card costs tens of thousands of dollars in legal fees and 5-7 years of headaches. I’d probably be coming in illegally too if I had to.
Coming here illegally can cost thousands of dollars as well.
jb
If you want to live in a place with reasonable diversity, try picking a college town in one of the Tax Foundation’s top-ten tax-friendliest states. Those states are likely to have low unemployment, and compared to the NY metro area you’ll be able to sock a ton of $$$ away in taxes you didn’t have to send to the statehouse.
pricesstillskyhigh Says:
May 9th, 2007 at 10:48 am
x-underwriter I think a lot of people talk in their native tongue more when they have kids to make their kids learn the language. My husband and I usually talk in english but ever since my son was born, we try to talk as much as we can in our native tongue. That’s only way we make him learn our language. We know that he’ll get fluent once he goes to school. I am from India and even though we have lot of friends from India, each one is from a different state and talks a different language. So talking to him at home in our language is the only way to make sure that he atleast knows to converse and understand our language.
skyhigh: just to appreciate the difference of a generation ago…..my Dad is fluent in Italian, English and is conversant in French, Turkish and Albanian. My mother is fluent in English and Italian [she was forced to conduct her Renaissance Art History thesis defense in Italian]. However, in the 1950’s/1960’s there was such a stigma against people who did not speak English, that my dad swore that he would never speak a word of Italian to me. To this day, my brother and I cannot speak any more that some vocabulary that we learned from our grandmother and commands that my mother used to blurt out at us.
#21 and #22
and probably more than 5-7 years of headaches.
By the way, time and time again, most every [intellectually curious] foreign national I meet says that it is FAR EASIER to learn to speak English in the United States and meet new people. In many way, the U.S. in general embraces diversity.
In the reverse, most U.S. citizens who venture abroad to live for periods of time have stated that most other countries are very much closed societies, and that in many instances very few people try to assist you with learning the local language [especially Western Europe].
What you do find are people who are interested in you because you are an American – for social or business reasons, and will likely talk to in English and keep you at a distance as kind of a novelty or freak show.
My point in #26. These groups of immigrants that fail to assimilate in the U.S. are making a concerted and conscious decision to do so.
F- ’em
#26: Amsterdam is a notable exception, the Dutch there speak better English than many native Americans. Not sure how it would be if an American relocated to one of the rural polders, but an expat in A’dam can live pretty happily as long as they avoid the pissed-off muslims.
And FWIW, my grandmother emigrated from scandinavia in 1920, LEGALLY, and raised my dad and uncle in a less-than-800sqft 1br apartment. ABC: Adversity Builds Character.
I was raised in a two language speaking house and I think its great that I was raised with two cultures. I apologize if I offendend anyone with my previous comment. I’m certainly not a bigot, racist, or whatever.
I will say this however, If you’re in a burning building and the police are screaming at people to use the stairway on the left side of the building and not the right. Every one better understand what they’re saying or that’s a problem. If immigrants don’t know how to speak english because every sign they see is in spanish and they feel they don’t need to know english, then you can see how these problems will arise.
The difference between now and then is two fold. Then you had to learn English or it would be very difficult to survive, now it is optional, and that is nto acceptable.
Then people came here for the opportunity etc, becasue the belief was America is better, now immigrants are told that their culture is just as important and just as valid as American culture, which is nto acceptable.
This attitude of I will only take what is beneficial to me, and leave the rest is not acceptable.
My parents immigrated here legally. My Father 9 months after arrival was drafted (Korea), he had 2 choices go home or go to Korea, he went to war.
He did not cry or complain, he went. I gurantee if that happened today some people would be out raged and say its nto fair. immigrants are being picked on etc.
Hi Every one,
I have been looking for a house in parsippany area for a year now. One thing I observed is that
many asians want to move here. Is there anybody here has some data how these wealthy immmigrants
make the price of housing hold up in this area?
Thanks
RentingInNJ: That your in-laws and/or parents seem to have that much sway over your lives would be a signal to me, were I in your shoes, to get the heck outta Dodge. ;)
NC really is not all that far. It’s a 9-10 hour drive and a 1-1/2 hour flight. Unless you are involved in the care of your parents, my opinion is that you should live where you would be happy.
Your mileage may vary.
Is there anybody here has some data how hese wealthy immmigrants make the price of housing hold up in this area?
How do you know what their incomes are?
jb
How do you know what their incomes are?
Hi, This is just anecdote. I met many immigrants
living in my apartment complex who are employed
in IT industry. They make ~90K/year and the houses they are looking for are in 500K range
which is on high side for parsippany. I thought
parsippany is not a very good school system, I can buy a house cheaper compared to say Montville. Prices in parsippany are not coming down but Montville townhouses are getting reduced fast as a monitor everyday. May be this is due to immigrants (Indian in particular) like parsippany? Check the ownership in hunting ridge.
Thanks
How does $90k salary qualify for a $500k home? Maybe if you have 2 of them (husband and wife both have good IT or healthcare jobs)..
pine_brook,
About 12 years ago, I interviewed a very successful Indian entrepreneur who told me that when people leave India, they’re not allowed to take their money out of the bank. That’s why the Indians are so big on gold. But when they come here, they’re starting over from scratch.
Not sure if the restrictions on transferring bank funds are still in place, but my guess is that they probably are.
I don’t know about the restrictions on transferring money but the gold isn’t enough to buy a 500k home. Based on my personal experience and experiences of friends and family this is what I have observed.
Even if you have lot of gold, nobody brings it here and atleast the people I know of don’t have that much gold to finance a 500k house. The Indians who typically come here are middle to upper middle class back home. So they don’t have much to carry here. Also keep in mind that a dollar is about 40 rupees. So you’ve to be rolling in money to be able to bring money.
Most of us come here so that we can increase our earning potential and save enough to retire back in India. You can ask any Indian what his/her plans and they will typically say go back to India in 5/10/15 yrs. Its another matter that most of them don’t ever go.
People who come here also come in different types of visas that are quite restrictive. For many visas, the moment you’re fired, you’re out of status and have 2-3 weeks to find a job or have to leave the country. So typically people don’t spend a lot of money on things like car, furniture etc. till they get a green card. It all adds to dp when you’re buying a house.
One piece of advise I got from many of my indian friends when I came here new was to have atleast 6 months buffer just incase. As far as I’ve seen in India as well as here, Indians tend to save for retirement, kids education etc. I have friends who’ve put down 25% on 500k houses and a few who have paid off their mortgages in 4-5 yrs.
pine_brook, 90K salary is probably the only thing you know of.
p.s. The biggest expense I can say for an Indian family in a given year is their trip to India. A trip costs anywhere between 6-7k in dollars including airfare.
“Most of us come here so that we can increase our earning potential and save enough to retire back in India. You can ask any Indian what his/her plans and they will typically say go back to India in 5/10/15 yrs. Its another matter that most of them don’t ever go.”
Another difference from immigrants of yesteryear who settled here. My grandparents came from Europe late 1800’s with the intention of staying, as most did back then.
“Most of us come here so that we can increase our earning potential and save enough to retire back in India. You can ask any Indian what his/her plans and they will typically say go back to India in 5/10/15 yrs. Its another matter that most of them don’t ever go.”
I didn’t quite convey what I intended to. Its true that most of us come here looking for a better salary, life, retirement etc. But when you initially come, you keep thinking that you’ll go back once you save $xx so you can retire. The feeling and intention to go back is strong b’coz you leave your family (parents) and come here.
In India, parents traditionally stay with their sons, so you feel guilty that you’ve abandoned them. And you can’t accept the fact that you like being here and don’t ever want to leave. so you keep fooling yourself by thinking that you’ll go back once you’ve acheived whatever you wanted to. Its just a way of dealing with the guilt. But in reality, very few of them go back because they don’t want to leave.
pricestill,
I wasn’t trying to suggest that the Indians are buying houses here with gold. Just that they’re not as “wealthy” as people seem to think, and might actually be coming here with a lot less than other immigrants because of their home country’s banking restrictions.
Former NNJ, you said:
“Another difference from immigrants of yesteryear who settled here. My grandparents came from Europe late 1800’s with the intention of staying, as most did back then.”
My grandparents on both sides came here between 1900 and 1901. They came because they really did believe the streets in America were paved with gold. Then they found themselves working as domestics for $1 a day and as factory workers. One of my grandfathers worked in the coal mines.
They intended to go back, but got stuck here because of WW I, the Depression, and then WW II; also the Stalinist purges in the Ukraine. Some of my grandmother’s relatives had their farms seized and they got sent off to the labor camps of Siberia – died there.
My one grandmother, who came here when she was 15, always felt terrible that she never saw her parents again. Most of her siblings were here or in Canada.
But I think it’s true that a lot of people come here initially with the intention of returning, and maybe that’s true with some groups. At least some of the Irish and the Greeks in this area seem to go back when they retire.
Lisoosh,
It sounds like you have read some of my brother in law’s stuff. He even attributes that wack job from Korea at VT as having become assimilated. Only crazy Americans shoot folks up like that.(something like that) I don’t make light of the incident but it highlights just how infectious American culture is right down to guns and violence as well as picket fences and green lawns on your piece of turf.
“how infectious American culture is right down to guns and violence”
Huh?
pricestillskyhigh:
Thank you for clarifying. Makes sense to me.
Scribe:
Hadn’t considered some of those things but I suppose they were true of my grandparents as well (they died before I was born.)
My point in #26. These groups of immigrants that fail to assimilate in the U.S. are making a concerted and conscious decision to do so.
My observation too. Dated someone whose mother immigrated 40 years ago but has MAYBE a 40 word english vocabulary. Does she take ESL courses? Nope. Does she attempt to engage non-spanish speakers? Uh-uh. She sits in her gubbmint-subsidized apartment and watches spanish language soap operas.
To be here that long and be so unaccomplished she (and her ilk) is either lazy, stupid, or apathetic. What else can it be?
SOT: My observation too. Dated someone whose mother immigrated 40 years ago but has MAYBE a 40 word english vocabulary. Does she take ESL courses? Nope. Does she attempt to engage non-spanish speakers? Uh-uh. She sits in her gubbmint-subsidized apartment and watches spanish language soap operas.
To be here that long and be so unaccomplished she (and her ilk) is either lazy, stupid, or apathetic. What else can it be?
I take it the 40-word vocabulary belongs to the mother, not the daughter. I suspect you have an overly rosy-eyed view of prior generations of immigrants, as regards language assimilation. The traditional work week for new immigrants is and was 11 hour days, six days a week. Between that and raising families, there’s not a lot of energy/capacity for learning a new language. In fact, learning a new language is damnably difficult, even for college grads. In fact, I’ve encountered loads of ABCA (American, British, Canadian, Australian) English instructors in China who cannot make themselves understood in anything more than pidgin Chinese, despite having worked there for years. And these are people with the time (25-hour workweek combined with being single and unattached) and intellectual capacity and training (from college) to learn a new language.
Note that in the early part of the 20th century, the children of Jewish and Italian immigrants had such low scores on IQ tests, because of language barriers (due to the faulty way in which the tests were written at the time, with significant dependencies on English language proficiency), that they were classified borderline retarded. What does this say about the English language assimilation of that generation of immigrants?
Learning a foreign language is a major endeavor. Chinese, Korean and Japanese students all get about ten years of English instruction. While abroad, I have yet to encounter one off the street who speaks comprehensible English. English comes easy to you because you learned it as a child. Not everyone did, and not everyone can.
HP: You want homogeneity? There was a guy in Germany once with unique facial hair trim that wanted to establish such a place. See what history thinks of his ideas…
Actually, most places around the world are pretty homogeneous, compared to the US. Including the countries of origin of your parents. In fact, I would wager that their countries of origin take in less immigrants than the US. Does this make them the moral equivalent of Nazi Germany?
HP: You want homogeneity? There was a guy in Germany once with unique facial hair trim that wanted to establish such a place. See what history thinks of his ideas…
And as to the facial trim, it wasn’t particularly unique or original to Hitler. Take at some old black and white photographs sometime. In fact, check out some Charlie Chaplin movies filmed while Hitler was merely a corporal in the muddy trenches of Western Europe.