Californians Who Move Away Are Finding The Grass Really Is Greener, New UC Study Finds

BERKELEY, CA — A new study from UC Berkeley reveals leaving California could pay off, especially for aspiring homeowners.

The study found that, on average, Californians who left for more affordable communities in other states improved their financial footing. They were also 48% more likely to own a home after seven years —an 11-point difference compared to people who stayed in California, according to the study.

“The price tag has gone up on the California Dream, and many families are leaving the state for more affordable places,” Evan White, Executive Director of the California Policy Lab at UC Berkeley, said in a statement. “The difference these moves make is stark. Their destination neighborhoods are half as expensive and they end up much more likely to own a home within just a few years.”

The study was conducted using anonymized credit bureau data spanning the last decade, according to the California Policy Lab. Using that data, White and co-author, Dr. Brett Fischer, a researcher at CPL, were able to provide one of the most detailed images of what happens after Californians leave the Golden State. The report also compares pre-pandemic and post-pandemic migration trends into and out of California.

“Though we cannot know their personal reasons for moving, this is suggestive evidence that affordability is driving their decision to move, or at least their choice of destination,” the authors said in their study.

California’s Population Decline

California, where one in nine Americans lives, is the most populous state in the country.

But its population is no longer growing like it once was. More people leave California than any other state and at a faster rate.

“Steady population growth over the last 60 years started to taper in the 2010s,” according to the study. “During the COVID-19 pandemic, the state experienced a net loss in population for the first time in its history.”

Several factors have contributed to the decline, according to the study, including deaths outnumbering birth rates.

But by far the biggest impact is that although California receives more people than any other state, it's receiving fewer than in the past, while more people are leaving, according to the study.

Over the last five years, 42 states sent fewer people to California than before the pandemic, according to the study.

The decline could impact California’s “political clout” on the national level, according to the study, including the potential loss of more seats in Congress.

Where Did They Come From? Where Did They Go?

The average person leaving California is not poor in “absolute” terms, according to the study. But they are worse off financially than their neighbors.

“Our report shows that people who leave California are increasingly leaving from higher-income neighborhoods,” Dr. Fischer said. “These movers are, on average, in a weaker financial position than their neighbors, and may be moving to attain the quality of life they see their neighbors enjoying but they cannot afford.”

Before the pandemic, the share of movers leaving higher-income neighborhoods was 34%, but that has since increased to 40%, according to the study.

Those who have left, on average, have a lower credit score and more student debt, according to the study.

Meanwhile, the number of people leaving what’s considered lower-income neighborhoods has been declining, according to the report. However, it’s unclear from the study why that is.

When Californians do move, they’re mostly settling in nearby states, according to the study.

Although most people think most Californians are choosing the Lone Star State as their new home, it’s actually Nevada that takes the top spot, the study found.

On average, Nevada has received 226 Californians per 10,000 residents each year since 2016. During that same time, 146 Nevadans per 10,000 moved to California, leaving a net of 81 people from California to Nevada, according to the report.

Idaho, Oregon and Arizona were the next three highest recipients of Californians during that time. Texas, meanwhile, ranked No. 11. States such as Wyoming saw a huge surge during the pandemic, while Tennessee has slowly been increasing its favor with Californians, according to the study.