Housing Prices in California
One of the major issues in California is housing prices. Finding affordable housing (or anything under $1,000 a month) is almost impossible as there is a shortage of living spaces for the current population.
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While the US median existing home sale price was $359,000 in February 2023, California’s median sale price for a home is $695,300. A median studio price is about $1,360 a month, without utilities (which is an additional $380 per month).
Businesses Relocate
Residents are not the only ones who leave the state. Businesses are moving their headquarters to different states. Stanford University’s Hoover Institution reports that 352 companies moved their headquarters out of California between 2019 and 2021.
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Anticipating the prominent shift in California’s economic landscape, businesses are attempting to avoid high operation costs and strict regulations by moving to a different state.
Economic Shifts in California
This shift of businesses indicates a prominent shift in California’s economic landscape while impacting employment opportunities, tax revenues, and the overall economic vitality of the state.
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These factors mean that Californians will be struggling to find more opportunities in the state. This means that they will have to look elsewhere for better opportunities.
No Long the Land of Opportunity
While California’s govern and those in leadership do love the state and try to better it in ways that appeal to some residents, their eagerness to expand government spending (with money they don’t have), put strict regulations on business (small and big), and focus on social engineering at the expensive of basic governance has backfired.
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Young people can’t find opportunities and wealthy people want to protect their money and businesses. People who want house or retirement are almost forced to look elsewhere. The golden promise of California was another causality of COVID-19.
The Death of Baby Boomers
Another issue behind California’s declining population is that post-World War II baby boomers–which is the generation born between 1946 and 1964–are starting to die. This generation’s kids, which are typically millennials, are not producing enough babies to replace them.
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“California’s fertility rate has fallen faster than most [states],” a public policy institute reported in October (via the Los Angeles Times). “In 2008 its rate was above the national average (2.15). By 2020, it fell to the seventh lowest (1.52).”
Impact of the COVID-19 Pandemic on California's Population
The COVID-19 pandemic also had a notable impact on California’s population. The pandemic took a death toll, particularly on older people, increasing deaths by 19% in 2020 compared to the previous year.
Source: Freepik
Foreign immigration into California also halted thanks to the pandemic, which was the main driver of population growth for several years.
California's Population Decline
But “the biggest reason we’re losing population is that people are moving out,” Hans Johnson, a demographer at the nonpartisan Public Policy Institute of California says. “That has slowed, but we’re still losing hundreds of thousands to other states.”
Source: Freepik
Newsom and legislators have been wrestling with the issue of high costs of land and labor for years by enacting new laws, but they haven’t generated much progress.
Better Quality of Life
Places like Southern Carolina, Texas, and Florida offer affordable housing for higher-income earners who are working remotely.
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Affordable housing isn’t the only reason why people are eager to move. Higher sales and gas taxes are encouraging those to find cheaper places to live to improve their quality of life.
California's Housing Affordability Crisis
As I mentioned before, California has a bit of a housing crisis. The Motley Fool reports that California has the second-lowest income-to-home-value ratio, despite the state’s residents making 22% more than the median US income.
Source: Wikimedia
Despite the higher incomes, Californians struggle with housing affordability challenges in a state where housing is extremely limited.
Moving Interest Hits Record Low
While Californians are leaving the state, California is struggling to see any upticks in their population. In data collected by moveBuddha, California ranked dead last in moving interest in 2022 and 2023.
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The woes of the state have spread across the US, and nobody wants to move somewhere that they can’t afford to live the best lives possible.
Top Destinations for Ex-Californians
Ex-Californians are looking for states that promise opportunity and affordability. While Oregon, Arizona, and Washington are practical options, three states are seeing a massive migration of those fleeing the Golden State.
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Texas, Florida, and New York have become the new home for many, showing that anywhere but California is the new place to be.