People are buying houses, at prices substantially above market prices (market prices up until a few months ago anyway). Who is buying these houses at massive markups from recent pricing? New Yorkers who pick up the phone and call realtors in shore towns asking 'I see this property listed at $xyz, is it still available? Yes? Where can I send the deposit, and how soon can I close?' No inspections, no haggling, no contingencies. The main reason seems to be that people who have been living in the city and have kids see no reason to keep paying massive taxes (real estate taxes, school taxes, city wage taxes, state income taxes) when they don't have to commute into the city and their kids aren't going to school. I'd assume it also 'helps' that there's no side benefits normally associated with living in NYC, like restaurants, concerts, sporting events etc.