The California Exodus Is Real. It Should Be a Wake-Up Call
A new report from the California Policy Lab at UC Berkeley paints a sobering picture of where California's housing affordability crisis is heading and who it's leaving behind.
The study tracked individual households using anonymized credit bureau data from 2016 to 2025, making it one of the most granular looks yet at California's migration patterns. The findings show that Californians who leave the state are moving to significantly more affordable areas and becoming far more likely to own homes. On average, movers relocate to neighborhoods where monthly housing costs are $672 lower, and after seven years, they are 48% more likely to own a home.
Proximity drives relocation popularity, with Nevada claiming the top spot, receiving a net 81 Californians per 10,000 residents annually. Nevada is followed by Idaho, Oregon, and Arizona. Contrary to most headlines, Texas and Florida rank only 11th and 20th, respectively. Most people aren't fleeing to the other side of the country. They're making a pragmatic calculation: go somewhere close enough to maintain ties, but far enough to afford a life.
Perhaps most telling is who is leaving. People moving out of California increasingly come from higher-income neighborhoods and appear financially weaker than their neighbors — carrying an average of $5,500 more in student debt and credit scores 17 points lower than those around them. These aren't people who failed to make it in California. They're people who were keeping up…until they couldn't.
I Get It. And It Worries Me.
As a lifelong California resident and father of two, I'll be honest: this data hits differently than an abstract policy report. I love this state. I've raised my family here, built my career here, and genuinely believe the Bay Area offers a quality of life that's hard to match anywhere in the country. But affordability? That's a real and growing problem, and I won't pretend otherwise.
What concerns me most isn't the people who can afford to leave and do so voluntarily. It's the young people who can't afford to stay and can't really afford to go either. The ones who grew up here, went to school here, want to build a life here, but are watching that door close in real time. As of 2024, California had the highest cost of living of any state, nearly 11% above the national average with rental housing running 53% over the national average and utilities 63% over. Those numbers don't leave a lot of room for a 28 year old trying to save a down payment on a teacher's salary or a healthcare worker's wages.
In Silicon Valley specifically, the affordability picture is even more extreme. The median listing price in San Jose currently sits around $1.1 million, which is the highest of any major metro in the country. When I look at the buyers I work with, the vast majority are using stock RSUs from their tech jobs to fund their down payments. That's not a real estate market in the traditional sense. It's a market that has essentially been restructured around a single industry's compensation model. If you're in tech, you have a path. If you're not, the math is brutally difficult and in many cases, simply doesn't work.
What This Means for the Market
None of this means Silicon Valley real estate is going to collapse. The demand drivers here like a world-class job market, top schools, and unmatched quality of life are structural and durable. But the long-term health of any community depends on more than just its top earners being able to participate in it. Teachers, nurses, firefighters, service workers, young professionals in their first jobs are the people who make a place function, and a market that prices all of them out isn't sustainable indefinitely.
The California Policy Lab's findings are a data-driven confirmation of something a lot of us have felt for years: the state is becoming increasingly bifurcated between those who got in early or earn enough to stay, and those who are being quietly pushed out. Nevada, Arizona, and Idaho are the beneficiaries of that dynamic. California, and Silicon Valley in particular, is the one bearing the long-term cost.
I don't have a simple answer for this. But I do think acknowledging it honestly, rather than pretending the market is working for everyone, matters. I hope for my kids sake, that things get better soon.
