Key takeaways
Californians tend to move not just for cheaper housing, but for a better balance of affordability, taxes, and lifestyle—states that combine lower home prices with strong job markets and decent quality of life rise to the top.
The “best” state depends on what you’re optimizing for: Texas and Arizona attract buyers seeking lower costs and business-friendly policies, while Washington, Oregon, and Colorado appeal to those who want cultural familiarity and outdoor access without California-level prices.
Relocation is as much a financial strategy as a lifestyle choice—lower taxes and housing costs can meaningfully improve long-term cash flow and retirement security, but only if buyers understand local housing markets, climate risks, and job prospects before moving.
Summary: Californians move to states that trade California’s high costs for better affordability, taxes, and livability—but the “best” destination depends on whether you prioritize savings, jobs, lifestyle, or long-term financial stability.
It seems that a perennial theme around living in California is that people are often thinking about leaving the state. You’ve probably heard the joke: “Will the last person to leave California please turn out the lights?”
As a native-born Californian, I can’t say I identify with the pull of other states. I’ve been all around this country, and all around the world – and there are plenty of great places to live, but none of them hold a candle, for me, to what California has to offer. And I know most Californians feel the same way. I know, because I talk to dozens of them every week, following up with people who have at one time or another expressed an interest in selling their homes.
But there’s no question that many long-time California homeowners (especially older adults in the Bay Area) will, for a variety of reasons, eventually decide to make a move out of a state. In my experience, for most, it’s the possibility of cashing in on the equity they’ve built up on their homes in California and moving to a place they’ll be able to pay cash for a home and dramatically lower their monthly expenses for a more comfortable retirement. For others, they’re moving to be closer to where their kids and grandkids have moved to – but this can get complicated when they have multiple kids and grandkids to choose from. And some folks have had it with California’s politics, packed highways, and high cost of…well, everything.
The single biggest impediment for people who want to cash in on their home equity is: where would I go? Most people do not sell for that simple reason – they don’t know where else they’d rather live. Interestingly enough, many folks looking to cash in on their home equity – that #1 reason for selling, in my experience – will remain in California, with some-day plans to move to Sacramento or somewhere in the Sierra foothills for example. This is often due to family and friends still living in northern California, and the desire to have a lower cost of living while not being half a continent away from them is a powerful reason to move “domestically.”
However, many Bay Area homeowners will in fact decide to leave the state, heading out for greener pastures beyond the Golden State’s borders. Many of them are quite up-in-the-air about where they would go. Two of the biggest criteria seem to be places where houses are cheap, and there’s lower taxes, especially income tax. So what are the top states that these California homeowners are considering? Let’s take a look.
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Most-Mentioned States to Move to from California
From a financial perspective, some states that make sense for Californians to move to are:
- Texas – Texas has no state income tax, which can result in significant savings for high-income earners. It also has a low cost of living, especially when compared to California. However, it’s important to note that Texas does have much higher property tax than California – the 7th highest in the nation.
- Nevada – Nevada has no state income tax, which combined with its low cost of living, can result in significant savings for residents. Its proximity to California and the Bay Area – especially Reno or North Lake Tahoe – makes it a favorite of Californians looking to sell and move out of state. Nevada also has low property tax, somewhere around 0.5%.
- Arizona – Arizona has a lower cost of living than California, with a warmer climate and lower housing costs. Property Tax in Arizona averages around 0.5% per year. And while rising temperatures in Arizona will be challenging for Bay Area folks who have enjoyed the mild climate, the mountainous areas of Arizona will be fairly enticing.
- Oregon – While Oregon does have state income tax, it has a lower cost of living compared to California and a thriving tech industry, which can provide job opportunities. It also has a lower property tax rate than California, and is not too far away for folks wanting to maintain connections to friends and family still here.
- Washington – Washington also has a state income tax, but it has a thriving tech industry, a lower cost of living compared to California, and beautiful natural landscapes. However, property in the Seattle area is not much cheaper than most of the Bay Area, and the Washington property tax rate is fairly high, averaging about 0.95%.
NAR 2024 Study on Inflows and Outflows by State
The National Association of REALTORS® (NAR) published a report in October 2024 that job relocation trends significantly influence local real estate markets. States like Virginia, Texas, and South Carolina are experiencing increased housing demand due to high job inflows, leading to rising home prices. Conversely, states with job outflows, such as Louisiana, are seeing decreased housing demand and potential price declines. For instance, 41% of professionals leaving Louisiana for Texas cited better job opportunities as their reason. These migration patterns underscore the strong connection between employment shifts and housing market dynamics.
Regarding California, the report notes:
While California remains a major job market, the state saw nearly 87,000 professionals leave for opportunities elsewhere, surpassing its job inflows of about 69,000. High housing costs—particularly in areas like San Francisco and Los Angeles—coupled with a high cost of living, have driven many workers to relocate to more affordable states like Texas and Arizona. California’s high state income taxes push workers to states with more favorable tax policies, such as Texas. Specifically, 14% of professionals found jobs in Texas, and 9% in Arizona. Washington (8%) and Nevada (7%) are a couple of other popular destinations for Californian professionals.
Most Affordable States for Californians to Move To
Those five are the states that I hear most-often cited as states where people from California and the Silicon Valley are considering moving to. However, the San Jose Mercury News recently published an article that offers a deep analysis of which states truly make the most sense financially for Californians to move to.
Here’s what the article’s author has to say in terms of which states specifically make the most sense financially for Californias to move to:
It’s important to remember that moving to a new state can impact your financial situation in many ways, so it’s essential to carefully consider all the factors and make an informed decision.
Colorado blends top-shelf pay with a slightly above-average cost of living. My spreadsheet says that’s a life worth $119 for every $100 in California.
Next best deals were in Minnesota and New Hampshire at $117. Then comes Illinois at $116, Utah and Maryland at $115, Wyoming, Kansas and Nebraska at $113 and West Virginia at $112. There’s a middle American vibe within this list.
And tropical beauty aside, Hawaii ranks last as a $73 value for $100 in California. It was one of 12 states where this math showed California was a better financial bet.
Making the decision to leave California is one that needs to be made very carefully. I’ve spoken with many people who left the state only to end up missing it, and wishing they could come back. But coming back to California can be challenging, because buying back into this market can be cost-prohibitive, especially if you haven’t been accumulating wealth significantly while you’ve been out of state.
If, however, after sober reflection you’ve decided that moving out of state makes the most sense for you, then I encourage you to get a copy of my special report – the top relocation destinations for Bay Area homeowners. This report explores where people specifically from the Bay Area are moving to, and why. I have another article where I evaluate the top 10 of 25 relocation destinations as determined by Forbes Magazine.
Concerned about Climate Risk?
While we have horrific wildfires out here, much of the rest of the country is susceptible to natural disasters as well – and many areas have much greater climate risk than most of California does. Explore my article on the best and worst climate risk areas for those relocating from California.
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Frequently Asked Questions
What are the most common states Californians talk about moving to?
In my experience working with Bay Area homeowners, the most-mentioned destinations are Texas, Nevada, Arizona, Oregon, and Washington. People usually bring these up because they’re looking for a mix of lower housing costs and (often) lower income taxes.
Why is Texas such a popular destination for Californians?
Texas is frequently top-of-mind because it has no state income tax and (relative to California) a lower cost of living in many areas. The key tradeoff is that property taxes are much higher than Californians are used to—so it’s important to compare the full “tax picture,” not just income tax.
If Nevada has no state income tax, why doesn’t everyone just move there?
Nevada is compelling because it combines no state income tax with proximity to California (Reno and North Lake Tahoe come up a lot). But “best” still depends on your priorities: climate, healthcare access, family proximity, job needs (if you’re still working), and what kind of lifestyle you want day-to-day.
Is Arizona a good move for retirement if you’re leaving California?
Arizona is often attractive because housing costs tend to be lower and property taxes are relatively low compared with many states. The big watch-out is climate—summer heat can be a deal-breaker for some Bay Area homeowners. Many people who like Arizona focus on higher-elevation or mountainous areas for a cooler feel.
What about Oregon or Washington—aren’t they more “California-like”?
They can be, which is exactly why many Californians consider them. Both offer beautiful landscapes and access to strong job markets (especially in tech-heavy areas). The tradeoff is that they’re not always dramatically cheaper than California in the most popular metro regions, so it’s worth comparing where you’d actually live—not just the state in general.
How do I choose the best state if my goal is to “cash out” home equity?
Start with what “winning” looks like for you: paying cash, lowering monthly expenses, being near family, or improving retirement stability. Then model the full cost-of-living picture—home prices, taxes (income + property), insurance, utilities, healthcare access, and how often you’ll travel back to California. A move can look great on paper but feel wrong in real life if it separates you from your support system.
What does recent data say about where California professionals are going?
A National Association of REALTORS® (NAR) report (October 2024) highlights that job relocation trends strongly influence local housing demand—and notes that Texas and Arizona are among the most common destinations for professionals leaving California, with additional moves to places like Washington and Nevada.
Is moving out of California always the best financial decision?
Not always. Moving changes your financial situation in multiple ways—sometimes the savings are obvious, and other times the “hidden” costs add up (tax mix, insurance, climate risk, healthcare, travel, and the risk of wanting to move back). The best approach is to treat the decision like a plan, not a impulse: compare scenarios and make sure the move supports your retirement and lifestyle goals.
What’s the biggest mistake people make when relocating out of California?
Picking a state based on a single headline factor—usually “no income tax” or “cheap homes”—without testing the full reality: property taxes, insurance, climate risk, healthcare access, social connections, and whether they’ll miss California more than they expected. I’ve talked to many people who moved, regretted it, and found it’s hard to buy back into California later.
How can I narrow down where to move if I’m still unsure?
A practical approach is to shortlist 2–3 states, then narrow to specific towns or regions (because the “best” place in a state is rarely the whole state). If you want ideas, I also recommend looking at small towns that work well for Silicon Valley retirees and comparing them against your budget, climate preferences, and family proximity.
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