- America's wealthiest people are starting to move into smaller cities, a new wealth report says.
- Meanwhile, the biggest cities in the US are starting to see fewer millionaires move in, it added.
- Here are the five hottest small cities that millionaires are moving to, per Henley & Partners.
Cities with smaller populations in the US are now becoming more popular with millionaires, as the influx of wealthy individuals slows in urban behemoths like Los Angeles and New York City, according to a new wealth report by London-based consultancy Henley & Partners.
"In particular, there is a notable internal 'semigration' of high-net-worth individuals currently underway," wrote Mehdi Kadiri, the head of the firm's North America arm.
The number of New York City's millionaire residents grew by 40% from 2012 to 2022, while Chicago had a 24% growth rate and Los Angeles had a 35% growth rate in the same time frame, per the firm's report.
That's below the national urban average of 48% for the last 10 years, Andrew Amoils, the head of research at consultancy New World Wealth, told Insider. The South Africa-based firm helped Henley & Partners collect its data.
Millionaires in these big cities still vastly outnumber those in smaller urban hubs — New York City has 340,000 millionaires, while Los Angeles has 205,400 and Chicago has 124,00, per Henley & Partners.
But the firm highlighted five smaller cities in the US that saw the highest growth rate of high-net-worth individuals over the last decade.
Here are the top five hottest small cities in America that millionaires are moving into. Cities are ranked in order from highest rate of millionaire population growth, to lowest.
Millionaire population growth rate in the last decade: 102%
Number of millionaire residents as of 2022: 30,500
Number of residents with $100 million or more in assets as of 2022: 86
Number of billionaire residents as of 2022: 9
Austin saw the highest millionaire growth rate between 2012 and 2022, with 30,500 people with $1 million or more in assets living in the city, according to Henley & Partners.
No state income tax and lots of space in the Texan city of around 1 million people has boosted its luxury real estate sector, wrote Nikki Greenberg, the founder of consultancy Real Estate of the Future, in the report.
Tech giants like Amazon, Google, and Meta have recently expanding there. And in November 2019, Apple announced a new $1 billion campus in Austin.
However, the city has seen somewhat of a hit with mass layoffs now ripping through the tech industry, Greenberg wrote.
Millionaire population growth rate in the last decade: 90%
Number of millionaire residents as of 2022: 9,400
Number of residents with $100 million or more in assets as of 2022: 64
Number of billionaire residents as of 2022: 6
While West Palm Beach has the fewest number of millionaire residents on Henley & Partners' ranking, the city of 117,000 people is also one of the least populated areas on the list.
Many wealthy individuals have taken advantage of hybrid and remote working as a result of the pandemic, moving to beautiful locations or places with summer weather, Greenberg wrote.
"The pandemic prompted many Americans to turn their second homes into primary residences, which had both lifestyle and taxation benefits," she wrote.
Millionaire population growth rate in the last decade: 88%
Number of millionaire residents as of 2022: 13,900
Number of residents with $100 million or more in assets as of 2022: 60
Number of billionaire residents as of 2022: 5
Scottsdale, a suburb inside the Phoenix metropolitan area, has around 242,000 residents, and 13,900 millionaires, per Henley & Partners.
The bump in millionaires is largely because of Scottsdale's fast-growing tech scene and rising real-estate sector, said Amoils, the head of research at New World Wealth.
The Phoenix-Mesa-Scottsdale metro area has around 158,000 tech workers, according to non-profit trade association CompTIA.
Top-end lifestyle and golf estates in Scottsdale have attracted many wealthy individuals from nearby Phoenix, and even from California, Amoils added.
Home prices in Scottsdale have soared over the last five years. The value of a typical home in Scottsdale has jumped from around $450,000 in 2018 to a peak $800,000 in September, according to data from Zillow.
Millionaire population growth rate in the last decade: 75%
Number of millionaire residents as of 2022: 38,000
Number of residents with $100 million or more in assets as of 2022: 160
Number of billionaire residents as of 2022: 12
Much of Miami's millionaire boom has come from an explosion in cryptocurrency-related riches, which is ushering in a new era of wealth there, wrote Greenberg.
"Crypto-friendly Miami has attracted cryptocurrency businesses and has also seen a spate of technology and real estate headquarters opening," wrote the real estate firm CEO.
But that also means the city of 440,000 is at risk of an "easy come, easy go" situation, Greenberg warned.
The 2022 crypto crash has thrown blockchain companies in Miami into disarray, given the "recent scarcity of crypto high rollers who once proliferated," she wrote.
Still, Miami is expected to rebound despite a slump in 2022, "due to factors that have traditionally made it a preferred location for buyers, such as its relaxed lifestyle and warm climate," Greenberg wrote.
Millionaire population growth rate in the last decade: 72%
Number of millionaire residents as of 2022: 11,900
Number of residents with $100 million or more in assets as of 2022: 112
Number of billionaire residents as of 2022: 8
Connecticut's neighboring towns of Greenwich and Darien have a combined population of around 85,000 people, and 11,900 millionaire residents. That means nearly 15% of people living there have upwards of $1 million in assets.
Greenwich in particular is becoming increasingly popular among hedge fund millionaires, said Amoils. Taxes there are considerably lower than in nearby New York City, he added.
"It's also a very nice place to raise a family," Amoils said.
Gun violence concerns and rising crime rates, among other factors, have driven many of America's wealthy to move abroad or shift their primary residences, Henley & Partners wrote.