As recently as last year there was concern about people leaving the state. But now we are begging you to leave….please! And we’ll shower you with money! The future migration trends – starting in 2023 – should show a remarkable pivot and either everyone who was going to leave has left, and/or California isn’t so bad after all.
Perhaps most striking, California is now losing higher-income households as well as middle- and lower-income households. During the pandemic, the number of higher-income households moving to California declined a bit, but the number leaving the state increased dramatically (from less than 150,000 in 2019 to almost 220,000 by 2021).
The losses of college graduates and higher-income households are likely related to the ability of many highly educated and highly paid workers to work from home. The Census Bureau’s Household Pulse surveys show that about two-thirds of the almost three million Californians who telework full-time (five or more days per week) have at least a bachelor’s degree. Among recent higher-income Californians leaving the state, over half (53%) report working from home.
However, while the migration of higher-income and more highly educated households is notable, these outflows are still relatively small in proportion to their shares in the state as a whole. For example, in 2021 California was home to 8.2 million adults (ages 20 to 64) with at least a bachelor’s degree; that year, the net outflow of this group amounted to 1.1% of the number of college graduates. Similarly, California was home to 9.0 million 18–64 year olds living in higher income households in 2021; the net outflow of this group was 1.1%.
Most people who move across state lines cite employment, housing, or family as the primary reason. Since 2015, California has experienced net losses of over 500,000 adults who cite housing as the primary reason, according to the Current Population Survey. About half of those who leave the state buy a house in their new state, whereas only one-third of those moving to California buy a house. Net losses among those who cite jobs as the primary reason totaled 309,000 and among those who cite family 307,000. The PPIC Statewide Survey finds that 34% of Californians have seriously considered leaving the state because of high housing costs. Political outlook might also play a role for some movers, as conservatives are more likely to contemplate leaving the state than liberals.
The picture painted by these trends illustrates the frustrations and economic challenges faced by many Californians. The state’s high cost of living, driven primarily by comparatively high housing costs, remains an ongoing public policy challenge—one that needs resolution if the state is to be a place of opportunity for all of its residents. Moreover—if these interstate migration patterns continue—California could experience sustained population losses for years to come.
“The number of homeowners deciding to sell homes in March 2023 was roughly on par with the number in April 2020, when early-pandemic uncertainty caused many to put off major housing-related decisions,” Realtor.com Chief Economist Danielle Hale told Yahoo Finance.