For decades, it’s been an alluring fantasy of many Californians.
Cash out. Leave the Golden State for somewhere more affordable, less crowded and probably less cool. Sure, you lose the beaches, hiking, cuisine and culture. On the other hand, you gain cheaper living, the chance to save money and make your paycheck — or 401(k) — go further.
Decades of rising costs have prompted many to make this choice. But does it really pay off the way they expect?
New data from UC Berkeley strongly suggest that for people of limited incomes who moved out of the Golden State, taking part in the California exodus can bring dramatically improved financial conditions.
The researcher studied the finances of people who left California over the last decade to see how well they did in their new communities. The California Policy Lab research covered people who left or arrived in California from 2016 to 2025 — millions in total. They generally left for nearby states such as Nevada and Arizona, but also for hot locales such as Texas and Florida.
Among the findings:
- People who left the state found that the move saved them almost $700 in monthly housing costs.
- They became 48% more likely to own a home in their new state compared with California, where housing prices are notoriously high.
Although the research covered all types of people who left the state, the differences were most notable for those with limited incomes who were struggling with affordability in California.
One surprise from the California Policy Lab’s findings: Those leaving the state are increasingly moving out of its wealthiest areas. The share of Californians departing the state from its top-third median-income areas rose by 6.4 percentage points between 2016 and 2025, while the shares from low- and middle-income neighborhoods dropped.
In other words, the pandemic caused a major shift in the type of person who leaves California, with residents of higher-income areas growing.
“The average exiter now leaves from a neighborhood that is 8.7% more affluent than in the pre-pandemic period,” the report stated.
Evan White, a California Policy Lab co-founder and author of the report, said he’s not exactly sure the cause of the trend. But he noted that tech workers in upscale Bay Area districts who can work remotely might find more affordability elsewhere. Another possibility is that lower-income residents “can’t keep up with the Joneses and aren’t able to attain the type of lifestyle they want to have,” causing them to look elsewhere, he said.
The price of a basket of typical goods and services in California from 2016 to 2025 is up about 38%, according to the California Department of Industrial Relations. Median home sale prices went up around 75% over the same span, per the state Employment Development Department.
Indeed, the data suggest that those leaving California are in significantly worse financial shape than their neighbors who stay. Those who left had $5,500 more (twice as much) student debt on average than their neighbors and 16% higher rates of credit card utilization.
The data, compiled over 10 years, are an indication of the affordability gap across California.
But it is far from a full demographic snapshot. Some of those who left California have returned, saying their missed the lifestyle and nature. California has bounced back from the pandemic, with populations rising again in big cities. Even some critics have noticed a new boom in San Francisco, hit hard by COVID-19 but now enjoying a rebound thanks to the artificial intelligence gold rush.
While the entertainment industry has seen significant retraction in Southern California, the tech sector in Northern California has generally remained strong.
Dowell Myers, a professor of policy, planning and demography at USC who was not involved in the research, said the Berkeley data reinforce the affordability challenges California faces, especially when it comes to housing.
The nearly $700 a month in lower housing costs is less than adequate compensation for those who leave the state, he argued, adding that many people leave because they have no other choice.
“It’s a really sad story,” he said.
As for young professionals who come to work in the Golden state, “we can’t hold them, that’s the lesson,” he said. “They come for opportunities, but housing is really key.”
The chart above shows the average monthly housing expenses for three separate groups between 2016 and 2025: those who moved from other states to California, those who moved within the Golden State, and those who left California for other states.
Before leaving California, those who left paid on average $2,376 in monthly housing costs. After relocating to another state, former Californians spent just $1,705 per month, a drop of $671. Those who moved from other states to California saw the opposite impact, with costs rising a similar amount.
“Pretty much anywhere else is more affordable than California,” said White, the author of the report. “People were going to dramatically less expensive locations.”
“Once we learned that,” he said, “it didn’t surprise me that they then became homeowners at higher rates.” What was surprising, however, was the magnitude of the change, White said.
White said he undertook the research to contextualize the shift in population over the last few years “because people care what’s happening with their friends and neighbors,” he said. “They don’t want to be the last one at the party” as others leave.
Still, the state’s outlook remains bright, White said. The state continues to mint millionaires, “so there are good reasons to stay and good reasons to come here” besides the obvious attractions such as lifestyle and weather, he said.
White, who was born in Altadena, now calls the Bay Area home. He’s a homeowner, but if he weren’t, he might consider leaving the Golden State because of high costs: “Sure, I could see that influencing me.”
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