Why Are People Leaving California — and Where Are They Going?

Are people leaving California? According to the latest PODS data, they’re not just leaving — they’re moving out of California in droves, which begs the question: Why is everyone leaving California? And where are they going?

A little background before we get into a deeper explanation: Just a few years ago, working from home was far from the norm, but today 75 million U.S. employees have jobs that are compatible with remote work. Thanks to this new work-from-home culture, many people have shifted priorities and decided to move out of expensive cities and states — a major one being California. In fact, the Los Angeles Times reported that people leaving California outnumbered newcomers by more than 700,000 between April 2020 and July 2022. California’s net move-out numbers reached a record 407,000 between July 2021 and July 2022. And in 2022 alone, more than 343,000 people left California — the highest exodus of any state in the U.S.

Okay, that covers the past few years, but what about now? Are people still leaving California in 2024? The answer is yes. As of May 2024, almost 18,000 people had already migrated out of the state. It’s clear that people are leaving the state, but why are people leaving California?

While it’s easy to blame changing working conditions for the reason why people are leaving California in droves, according to the Department of Finance, the truth is, California has been struggling with resident retention for nearly 25 years. Once the golden child for a burgeoning population, California has been losing its residents to other states every year since 2000. 

Why People Are Leaving California

Why are people moving out of California? To put it plainly, the No. 1 reason is that California is expensive. The state consistently ranks in the country’s top five priciest states — in 2024, the Golden State comes in at the top spot. There are other reasons why Californians are fleeing the state, though.

An Expensive Housing Market

According to Zillow, the average home price in California is $785,000. Even though some areas are seeing stabilizing or even dropping prices, as a whole, home values in California remain high. Increasingly high costs of living, housing, and transportation coupled with an increase in crime, pollution, and congestion has caused many people to relocate to more affordable cities and states.

High Taxes

Some people are also moving out of California because of the state’s notoriously high taxes. California has the nation’s highest state income tax rate at 12.3 percent, along with steep sales and gas taxes. These financial burdens have driven many higher-income residents to states like Texas and Nevada, where no income taxes are imposed.

Low Job Growth Rate

As if high house prices and taxes weren’t enough, another reason why Californians are leaving may be the sluggish job market. In recent years, California's job growth rate has been trailing behind the national average. Several factors contribute to this trend, including the state's high cost of living, strict regulations, and the ongoing challenges in key industries such as tech and entertainment. The slow job growth has raised concerns about the state's long-term economic prospects, as businesses and workers alike reconsider their place in an environment where opportunities may be more abundant elsewhere.

Businesses Are Leaving California

As mentioned, the low job growth rate goes hand-in-hand with the fact that some businesses are leaving California. A 2024 article by the Hoover Institution calls California one of the worst-performing states in the country when it comes to job growth, with nearly all newly created jobs falling under the government sector. Additionally, 441 businesses have left California since 2018 and moved their headquarters to a different state. High rent, high taxes, high costs of living for employees, and red tape are just a few reasons cited by the exiters. 

Curious where everyone is headed? We’ve analyzed the latest PODS moving data from July 2023 to August 2024 to find out which cities and states people in California are moving to in 2024. A few things we noticed they have in common? Green spaces, nice weather, good public transportation, and big city amenities — all with a more affordable cost of living.

Top Destination Cities for People Leaving California

People leaving California are packing up and heading for the stunning scenery of the Pacific Northwest and warm weather of the Southeast. Cities like Dallas, Seattle, Nashville, Phoenix, and Boise top the list of the most popular cities for people moving out of California. 

Here’s a closer look at these top city stats and overall appeal. 

Dallas, Texas, is the top spot for people leaving California, thanks in part to its lower cost of living, affordable real estate, and lack of state income tax.

Thinking about moving out of California and relocating to Texas? If the Lone Star perks we listed above are making you see why people are leaving California in droves — and maybe you’re interested in joining them — you're going to want to make sure you read this first!

2. Seattle, WA

• Cost of living: 158.1 (31% lower than San Francisco)
• Median household income: $116,100 (15% lower than San Francisco)
• Average home value: $869,600 (33% lower than San Francisco)
• Average rent (one-bedroom): $2,225 (32% lower than San Francisco)

Moving from San Francisco to Seattle will stretch your dollar further, especially when it comes to housing and health costs. Although the median income is only about $20,000 less in Seattle, you’ll save the difference in rental costs, while also being able to cut your general cost of living expenses down by almost half. Seattle may be one of the more expensive cities people flock to in the Pacific Northwest, but for those coming from the likes of San Francisco, it’ll feel much more affordable. Speaking of affordable, the PODS Blog has some additional tips on how to make the most of your money in Seattle.

Seattle and San Francisco are somewhat similar when it comes to weather, with Seattle having more rain and less variation between summer and winter temperatures. And, like San Fran, Seattle is a tech city full of culture, live music, and a relaxed but driven mindset. Residents here have their pick of amenities from national landmarks like the Space Needle (with stellar views over the city), good transportation, farmers’ markets and food stalls, gorgeous outdoor parks, and a good sense of community. Seattle is also a super bike-friendly city with great public transit — full of young, progressive, and artistic residents — much like San Francisco. 

Those new to Nashville will appreciate the lively bar and music scene, delicious takes on Southern cuisine, and mostly moderate weather.

3. Nashville, TN

• Cost of living: 104.7 (32% lower than San Diego)
• Median household income: $71,300 (28% lower than San Diego)
• Average home value: $441,800 (57% lower than San Diego)
• Average rent (one-bedroom): $1,750 (40% lower than San Diego)

Residents living in Nashville may earn about $27,000 less a year than those in San Diego, but they’ll pay a lot less for things like groceries, transportation, and housing. In fact, average home values in Nashville are a whopping $586,000 less than San Diego (which means you’d have to work roughly 20 years more in San Diego to make up for the housing price difference). Renting in Music City is also cheaper at about $1,200 less a month, while the overall cost of living is 32 percent lower, making that $27,000 difference worth even less. 
 
Both Nashville and San Diego have a median age of around 34 (the Southern California city is slightly older by just under a year), making them both young, energetic locales. And those new to Nashville will appreciate the lively bar and music scene, delicious takes on Southern cuisine, and mostly moderate weather. Live music is available day and night, parks and beautiful green spaces are abundant, and there is a thriving arts scene.

4. Phoenix, AZ

• Cost of living: 113 (51% lower than San Jose)
• Median household income: $65,000 (48% lower than San Jose)
• Average home value: $430,000 (70% lower than San Jose)
• Average rent (one-bedroom): $1,525 (48% lower than San Jose)

There’s something grand about Phoenix, Arizona, and we’re not just talking about its most famous natural landmark. It has considerably lower housing prices and living costs than California, so it’s perfect for those who want year-round sun without sky-high prices. While some may think of Phoenix as a retirement paradise only, the truth is actually quite different. Phoenix has strong school districts, plenty of job opportunities, and tons of luscious golf courses, making it attractive to young professionals, families, and — yes — retirees, too. Additionally, because Arizona has lower taxes than California and no state tax on Social Security benefits, it’s a great locale for those who want to make the most of their income.

Sure, San Jose may be known for its tech empires (hello, Apple and Google headquarters), but if you’re in this industry, don’t discount Phoenix. Phoenix has an emerging tech presence itself, with both new startups and established giants making their mark. In fact, since 2019, nearly 3,000 new tech jobs have been created statewide.

California has gorgeous views, but don’t discount the natural beauty of Boise, Idaho. 

5. Boise, ID

• Cost of living: 119.6 (47% lower than Santa Barbara)
• Median household income: $76,400 (12% lower than Santa Barbara)
• Average home value: $490,200 (73% lower than Santa Barbara)
• Average rent (one-bedroom): $1,600 (45% lower than Santa Barbara)

Yes, Santa Barbara is one of the most beautiful places to live in California, but the high cost of living is partly to blame for people leaving California. The cost of living in Boise, however, is nearly 50 percent lower than in Santa Barbara — but it’s the steep dip in housing costs that are the real catch. The average Santa Barbara home is priced at more than $1.8 million, while Boise’s average is just over $490,000. Relocators from California will also appreciate Boise’s lower tax rate, including the 6 percent sales tax.

Outdoor enthusiasts are flocking to Boise for its small-town community feel and gorgeous scenery (it basically feels like you’re living inside of a park). And while there are plenty of bars and restaurants to enjoy, the biggest draw is the city’s access to wild nature, miles and miles of maintained trails, and all-season outdoor activities. People are catching on to everything Boise has to offer, including its low cost of living and high quality of life.

Q: What age group is leaving California? A: According to a study by the Public Policy Institute of California, the demographics of the people leaving California are high-income adults.

Top Destination States for People Leaving California

Spots like Austin, Texas, have the cultural appeal of California without the incredibly high cost of living.

1. Texas

• Cost of living: 94.2 (37% lower than California)
• Median household income: $73,000 (21% lower than California)
• Average home value: $306,800 (61% lower than California)
• Average rent (one-bedroom): $1,950 (32% lower than California)

For years, the great big state of Texas has been wooing residents from California, and this year takes the lead as the top state for California relocations. For many finance-strained Californians, cities like Austin, Dallas, San Antonio, and Houston offer sunny weather, job opportunities, and culture, which is likely why people are fleeing California for these hotspots.

Texas can also boast that its cost of living is lower than the national average index of 100. The median household income may be almost $19,000 less than you’ll find in California, but the substantial drop in cost for homes, rentals, and everyday expenses — not to mention the fact that there’s no state income tax — are big reasons why people are leaving California and moving to Texas. 

Q: What state are Californians moving to the most?  A: The Lone Star State takes the top honors for folks leaving California — for all the reasons we explore above — followed closely by Florida.

2. Florida

• Cost of living: 103.1 (31% lower than California)
• Median household income: $68,000 (26% lower than California)
• Average home value: $399,100 (49% lower than California)
• Average rent (one-bedroom): $1,800 (16% lower than California)

Florida may get a lot of flack, but numbers don’t lie. The Sunshine State has been a go-to spot for relocations, including those from California. Floridians make an average of 26 percent less a year than Californians, but the overall cost of living in Florida is much lower. Another reason why people are leaving California for Florida is because Florida’s real estate market is booming. Even though values have almost doubled in the past decade, the average home value is still close to 50 percent less than what you’d find in California. 

Florida offers up familiar sunny weather with mild winters and hundreds of miles of sandy coastline, so it’s easy to see why this Southern state has attracted so many people from California. Flip flops, t-shirts, and sunglasses are wardrobe mainstays in both states, so you won’t even have to shop for new clothes (unless you want to)!

Moving to Florida from California? Here’s everything you need to know about how to make the move and what to expect along the way.

Enjoy being on the West Coast but want your income to stretch farther? Move north to Washington State.

3. Washington

• Cost of living: 121.9 (19% lower than California)
• Median household income: $90,300 (2% lower than California)
• Average home value: $601,000 (23% lower than California)
• Average rent (one-bedroom): $1,650 (23% lower than California)

Just a few days’ drive up the coast and Californians can cross the border into their new home state of Washington. While the weather here isn’t quite as sun-soaked as Southern Californians may be used to, relocators coming from Central and Northern California may find it quite similar. Cities like Seattle draw in transplants looking for bustling city life surrounded by nature and mountains. (Sounds a lot like California, yeah?) The average household income in Washington is only a few thousand dollars less, so you’ll see the most difference in how far it’ll stretch. Housing is one area of relief, as average home values are around 23 percent less than in California. 

The moody state of Washington is likely to appeal most to Californians who appreciate the outdoors and are pining for a place with great public transportation. Washington also has a relatively low median age, just like California. Seattle is the most bopping city in the state and where you’ll find the highest population and your standard big-city amenities, such as noteworthy museums, performance venues, and cultural landmarks. 

Q: Why is California losing so many people?  A: People leaving California name a few reasons for their departure, but cost of living seems to be at the top of the list. Home prices are high in the state, but job opportunities and salaries aren’t matching the big price tags, making the dream of homeownership unreachable for many Californians.

4. Tennessee

• Cost of living: 89.9 (40% lower than California)
• Median household income: $64,000 (30% lower than California)
• Average home value: $326,100 (58% lower than California)
• Average rent (one-bedroom): $1,250 (42% lower than California)

The median household income in Tennessee may be $28,000 shy of what it is in California, but the change in cost of living in this southern state will have you feeling rich, particularly if you’re planning to work remotely with your California-based job. Tennessee’s cost of living runs below the national average and ranks a staggering 60 points lower than California. Average home values are almost $460,000 less in Tennessee, while rent is around $900 cheaper per month for a one-bedroom. There’s also no state income tax here, a major boon for Californians. 

Tennessee weather is warm and winters are mild, which can be a particular plus for Californians used to the sun or those who are craving more of it. There’s also a ton of tasty food, loads of southern hospitality, and views of the famous Smoky Mountains. Although Tennessee is a landlocked state, residents still have access to waterfronts via the state’s variety of lakes and rivers. There’s also no shortage of music festivals and fairs, outdoor activities, and whiskey (or moonshine if you want to try something new). Did we mention the out-of-this-world barbecue?

Vibrant nightlife, a mild climate, and a state full of natural beauty — these are just a few reasons why Californians are moving east to Nevada.

5. Nevada

• Cost of living: 109.7 (27% lower than California)
• Median household income: $71,600 (22% lower than California)
• Average home value: $445,400 (43% lower than California)
• Average rent (one-bedroom): $2,100 (2% lower than California)

Vibrant nightlife, a mild climate, and a state full of natural beauty — these are just a few reasons why Californians are leaving their state and heading just slightly east to Nevada. Not only are home values almost 45 percent lower in Nevada, there’s a significantly lower cost of living, which makes up for the fact that average incomes are around 22 percent lower. Plus, did we mention that there’s no state income tax and low property taxes?

Another reason why people are leaving California for Nevada has to do with employment opportunities, especially in the entertainment and technology sector. Nevada has a business-friendly environment with fewer regulations and more affordable real estate.

Are you one of the people leaving California? PODS makes moving out of California simple with flexible moving options, built-in storage, and flexible scheduling. And even if you’re leaving Los Angeles or moving out of San Francisco, we’ve got you covered with PODS City Service, the easy way to move out of a big city. 

Alex Keight is a writer who has lived — and moved — all over the country and the world. She is an expert at packing, whether it’s for a long-distance move or a short weekend trip. When she’s not writing or on the move, Alex spends her time giving her cat booty pats, cooking up dishes in the kitchen, and buying way more books than she knows she’ll ever actually get to reading.

Editor’s Note: Monthly rental prices were rounded to the nearest $25 and median home incomes and home values were rounded to the nearest $100 for ease of reading.

(Source for image featured at top: Leah Kelley via Pexels)