The Wall Street Journal reports that all the rich people in New York City are moving downtown. The headline claims "New York's Wealthiest All Want to Live Downtown Now". (link) I'm not surprised by this statement, I want to believe it, but as a data scientist, I'd like to know how they prove it.
I suppose they can run a survey and interview a bunch of rich people. I imagine that might be a tall order, as rich people might not be very responsive. Perhaps they found their way to a wonderful dataset that shows the movement of rich people. That's not out of the realm of the possible. We know that someone was able to trace private planes around the world (link). I imagine the dataset would be quite small, as uptown/downtown NYC are not the only desirable addresses for rich people. Maybe they have good data on housing inventory. Let's find out.
There are two classes of relevant evidence. First, I'm looking for evidence of the trend. Second, for any causal explanation they provide, I'd like to see evidence of those linkages.
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Let's skim through this article, and I'll mark down each piece of evidence I encounter.
A financier sold a West Village apartment for $60 million recently, which the couple had purchased for $29 million nearly a decade ago. This is a "record" for downtown Manhattan.
This is presented as evidence for the trend. What kind of evidence is this?
It's an anecdote. It's an extreme value of an anecdote. This anecdote uses house prices as a proxy for people movement - it assumes that if house price increases, then a wealthy person has moved from uptown to downtown. In fact, the $60 million record doesn't mean anything unless we also know that the $29 million was not extreme.
Let's keep going.
The buyer worked at Jane Street Capital, a quant trading firm, which has recently expanded its headquarters located nearby.
Already, the journalist has made a causal claim - that the downtown migration trend is due to rich folks wanting to live close to their work. The evidence for that is another anecdote. It'd have been more convincing had Jane Street moved its HQ from uptown but that's not what happened.
Downtown real estate prices are starting to "rival the city's most expensive uptown enclaves".
This assertion is not supported by any statistic. We don't know how wide the gap was, and how much it changed. Should there be data, we'd have an idea which districts are considered uptown and which downtown.
"As finance and tech firms have migrated downtown—alongside new retail, parks, and cultural institutions—a new wave of luxury condo development along the West Side Highway is luring wealthy buyers to neighborhoods like the West Village, Tribeca and Chelsea."
I left the above as a direct quote. This one citation contains a few more causal assertions, with zero data. Notably, the anecdote of Jane Street Capital should not even count because Jane Street did not "migrate" downtown. In subsequent paragraphs, they mention the names of some of these new developments but they never named any new retail, parks and cultural institutions.
Next:
A real-estate agent says that wealthy people are "buying up the West Side Highway".
Expert testimony. It's possible that these experts know what they are talking about, I'll give them that. Still no data or statistic in sight.
"There were more $30 million-plus home sales below 34th Street in the past five years than in the previous decade, according to data from Corcoran Sunshine Marketing Group. Since 2023, the area has seen more than $1 billion worth of home sales above $20 million."
Now arrives the first bit of data. The first sentence compares downtown sales across two periods of time. This can't prove a preference for downtown since we don't know the trend in uptown neighborhoods for those time periods - it's totally reasonable to believe that uptown prices may also have inflated a lot during the last 15 years. The second sentence gives a snapshot value of home sales in one time period, which does little to support the claimed downtown migration trend.
Since we are talking about economic value stretching back 15 years, those figures ought to have been inflation-adjusted. Another problem is the varying definition of downtown - two paragraphs back, a different sentence mentions "sales and listings below 14th Street".
Three more sales transactions are cited, two with just the current sales price, and one with both current and prior sales prices.
This raises the count of anecdotes to four. Since each transaction has a buyer as well as a seller, we'd also need to know where the seller moved to. If buying a home suggests preference for the neighborhood, does selling a home indicate preference for some other district?
A set of current listings with sky-high listing prices are mentioned.
Assuming these homes eventually find buyers at the listing prices, they would add to the anecdotal evidence.
"Downtown has long drawn wealthy buyers".
I'd label this anti-evidence. This statement undermines the claim of a recent trend.
The next few paragraphs run down a list of financial and tech firms that have set up shop in Hudson Yards.
The alleged link between employment and residence is questionable because we are talking about $50 million homes, not $5 million homes. Sure, Google is "one of the weathliest corporations" in the world but how many Google employees can afford a $50 million home?
The supply of homes for the ultrawealthy is limited downtown. New developments are making larger homes with luxe amenities comparable to those uptown.
This also works as counter-evidence. Are prices downtown increasing because of shifting patterns of demand, or is it because these homes are larger and have better amenities? This section further muddies the causal picture.
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Let's summarize. The entire article contains one paragraph that cites two statistics, there are a bunch of anecdotes, and there are lots of unsupported story-telling.
Regarding the existence of a downtown migration trend, all the included evidence is anecdotal. We only learned that some rich people paid a lot of money to buy downtown homes. We don't know where they moved from. We don't know where the sellers moved to. We don't know the trend in real-estate prices uptown, with the unspoken assumption that they did not rise, or did not move as drastically. In the end, we're asked to trust the experts.
Regarding why rich people are preferring downtown, the main causal explanation is tech and financial firms relocating downtown. It would have been useful to know, for example, what proportion of these workers own $50 million homes. Several other causes are also mentioned, such as larger homes, homes with better amenities, new parks and cultural institutions. All evidence is anecdotal, and we again must just trust the experts.
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