Tens of thousands of professionals left California last year, but few moved to the state as exorbitant costs of living and high taxes make it difficult to retain talent.
Nearly 87,000 California professionals died last year, and only 69,000 moved to the state, the report said. Published by the National Association of Realtors.
The data comes on the heels of a new Bureau of Labor Statistics report that found California's unemployment rate rose to 5.4% last month, the second highest in the nation.
California's unemployment rate was 5.3% in September and 5.1% in October. Nevada was the only state with a higher unemployment rate – 5.7%.
NAR's report is based on data from the U.S. Census Bureau and finds that workers formerly based in California are choosing to move to more affordable areas such as Texas and Arizona.
Texas was the biggest beneficiary of the California exodus. According to the report, 14% of professionals who left California in 2023 resided in the Lone Star State.
Texas also accepted a total of 7,036 professionals. Of those, 12% were from California.
Montana has experienced rapid economic growth since the pandemic, with a net migration of nearly 1,200 professionals and nearly 1 in 10 from California.
Arizona, another state with a relatively favorable tax policy, absorbed 9% of the professionals who left California.
Of those who left California, 8% chose Washington state and 7% moved to neighboring Nevada. Texas, Washington, and Nevada have no state income tax.
According to the NAR report, California suffered the largest net immigration loss of any state (more than 18,000 people).
“California's high state income taxes are pushing workers to states with more favorable tax conditions,” said Nadia Evangelou, senior economist at the National Association of Realtors. told SFGATE.
“The lack of affordable housing not only impacts homebuyers, it also impacts the state’s ability to retain talent.”
Illinois had the second-largest net migration loss, with 4,598 professionals leaving the state.
New Jersey reported a net loss of 1,810 professionals, and New York cut 1,698 workers, the report said.
