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The California Effect: Texas is the Top Destination State for Californians

Americans are known to be one of the most mobile nations in the world, and Californians manage to top the charts, with over 690,000 of them moving to a different state during 2018. However, the Golden State has always exerted a particular attraction on the rest of the states, if not the world, and this is one of the reasons why its real estate is getting more expensive by the year, the demand translating into more competition and higher prices.

Despite the massive exodus, California takes the third spot regarding the number of newcomers welcomed in 2018, closely following Florida and Texas, with a little over 500,000 new residents. Among them, the most represented group are former Washingtonians, about 38,000 of them making up 8% of all newcomers. But not all things are equal, and some parts of California are more appealing than others. Ten counties account for 75% of the new population influx, with LA County attracting more than 100K new residents in one year.

The Golden State also receives many new residents from outside of the US, particularly from Africa, Asia, Central America, the Caribbean and Europe.

Why do Californians leave?

Americans have always been economically-minded, counting on moving and mobility when they’re in search of new opportunities. Whether pursuing better housing, more specialized academic opportunities or a more vibrant cultural and entertainment scene, moving gives people freedom of choice when it comes to living in the place that best satisfies their needs.

Californians turned out to be the most mobile of all Americans, with several hundred thousand of them fleeing the state annually.

Among the main reasons why so many Californians decide to pack up and move to other US states are housing and living costs. According to Yardi Matrix data, the cost of renting an apartment in California now exceeds $3,700 per month in the San Francisco area, $2,530 in Los Angeles, and $2,729 in San Jose.

As a matter of fact, a recent report by Edelman Intelligence claims that 53% of Californians are considering moving out of state because of the high cost of living, while 72% of the state’s residents consider that the expense and availability of housing is a serious problem for them. This serious housing crisis threatens California’s economy and leads to further possible issues.

Another issue that the state’s residents have to deal with is sky-high taxes. California state taxes are known to be among the most high, if not the highest, in the country. According to a guide to California’s state taxes conducted by The Balance, the state-level sales tax rate remains the highest in the nation as of 2018 at 7.25 percent. Combined with local sales taxes, the rate can reach 10 percent in some Californian cities. The state also has some of the highest income tax rates in the country, with ten personal income tax rates ranging from 0 to 13.3 percent as of 2018. However, the property taxes rank as the 16th lowest in the country, with an effective rate of 0.76% as compared to the national average of 1.1%.

It’s no wonder then that the states with low tax burdens are attracting plenty of Californians.

Where do Californians go?

Of the busiest moving directions, five originate in California, and the interstate migration route that attracted the most people in 2018 was California to Texas. According to STORAGECafé, over 86,000 people chose to relocate from California to tax-free Texas during 2018. Arizona takes second place as the most welcoming state, with more than 68,000 Californian newcomers, followed by Washington, with over 55,000 people who prefer the famously cloudy state over sunny Cali.

How Much Does It Cost to Relocate from the Golden State?

When it comes to the most expensive moves, Californians top the list once again. One route that is highly priced is California to Colorado, for which one has to pay between $4,000 and $4,500. Comparatively, however, it is not a popular migration path, with only 22,288 people completing the move in 2018. Californians also pay a big-ticket when moving to Idaho – between $3,900 and $4,300, or to Illinois, for which the price tag varies between $3,600 and $3,700.

However, unlike the previous destinations, which saw only a relatively small number of Californians last year, Oregon is pretty popular, with more than 43,000 people moving from California to Oregon in 2018. The cost for such a move varies between $3,700 and $4,100, which brings the total amount paid for the route to an average of roughly 176.5M per year.

Still, taking into account both the number of moves and the minimum associated costs, the most expensive relocation route is CA to TX with a $318M total price tag.

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About the author

Diandra Stieger

Diandra is a creative writer for RENTCafé.com. With an academic background in English literature and linguistics, Diandra has a strong passion for real estate. She covers a variety of topics, from marketing trends to entertaining articles about urban development. When she’s not catching up on the latest real estate deals, she’s usually busy traveling, reading, or learning new languages. You can get in touch with Diandra via email.

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