Own Luxury Homes®
Why People Are Leaving California and New York 2026
CA: $672/mo average housing savings after leaving (CA Policy Lab March 2026); avg home price $398K lower; 48% more likely own after 7 years. CA median home $820,800; top income tax 13.3%; U-Haul #50 for 6 straight years. LA County: −54K residents 2024–2025. NY: net domestic loss despite 87K absolute arrivals; mid-tier prices softening. IL: property tax 2.0–2.5%; Chicago-to-Nashville tax savings ~$12K/yr combined. DC: surged #14→#4 outmigration (DOGE effect); prices −6.1% YOY; DOM +161%. Own Luxury Homes® 12-Point Agent Integrity Audit™ — relocation specialists.
Why People Are Leaving California, New York, and Illinois — And What It Does to Home Prices
Understanding why people leave high-cost states matters for two distinct audiences: the people still in those states deciding whether to go, and the buyers in destination markets trying to understand why prices moved the way they did and whether the migration demand is sustainable. This page covers both.
California: The Most Consequential Migration Story in America
Why People Are Leaving and What It Costs to Stay
California has the highest median home sale price in the nation: approximately $820,800. The state has the highest top marginal income tax rate in the nation: 13.3%. Everyday costs exceed national averages: groceries: +11%; gas: +40%; utilities: +61%. LA County lost 54,000 residents between 2024 and 2025 alone. The California Policy Lab study tracked actual people over 9 years and found what leaving actually produces: Monthly housing cost in California: $2,376. Monthly housing cost after leaving: $1,705. Savings: $672/month, $8,064/year. Average home price in destination neighborhood: $398,000 lower. Homeownership probability 7 years after leaving: 48% higher. Even more striking: moving within California produces almost no relief — average housing costs for intra-state movers rose slightly, from $2,263 to $2,277. The relief only comes from crossing the state line. Who is leaving: increasingly higher-income households. The share of exits from higher-income neighborhoods rose 19% over the last decade. The state is losing the households that were once able to make it work.
What California’s Outmigration Does to Home Prices There
The Complex Price Dynamics of an Exodus State
Counterintuitively, California outmigration has not collapsed home prices. Why? Because the people leaving are replaced, in different proportions, by international migrants and high-income professionals. The buyers who remain in California are increasingly wealthy: cash-rich, equity-rich, or earning technology and finance salaries that the departing middle class cannot match. The result: prices are flat to slightly declining in many California markets but have not crashed. San Francisco: prices flat to down moderately; inventory building; tech layoffs and remote work reducing demand. Los Angeles: slight softening in some submarkets; wildfire-adjacent markets particularly affected. San Diego: more resilient; military and biotech demand providing a floor. Inland Empire (Riverside/San Bernardino): previously gained from coastal migration; that inflow is now reversing as people move out of state entirely. The California buyer opportunity in 2026: for buyers committed to California, the softening provides more negotiating room than 2021–2022. The inventory is building. The frenzied bidding wars are gone in most markets. If your income is California-based and you’re not going remote, the case for buying in California has gotten incrementally better.
New York: The Nuanced Picture
Outmigration vs Raw Attraction Power
New York state consistently appears on outmigration lists. But the story is more nuanced than "everyone is leaving New York City." Census data shows New York City added 87,184 new residents (absolute) between July 2023 and July 2024 — ranking it #1 by raw inflow. The problem: even more people left. The net is negative. Who is leaving New York: middle-income households priced out of homeownership. Young families choosing suburban markets with lower costs. Retirees seeking warmer climates and lower property taxes. Who is arriving: international migrants, finance and media professionals, ultra-high-net-worth individuals drawn to global city amenities. The real estate result: NYC prices are resilient at the high end (global demand floor). Mid-tier NYC prices are under moderate pressure. Upstate New York and suburban New York: softening as outmigration removes demand. Top outmigration destinations for New Yorkers: Florida (traditional retirement destination), Texas (lower costs, no income tax), North Carolina (Raleigh, Charlotte increasingly attractive), Connecticut and New Jersey (counterintuitively — NYC workers seeking space).
Illinois: The Property Tax Problem
Why High Property Taxes Are Driving People Out
Illinois’ outmigration is distinct from California and New York in one specific way: it is heavily driven by property taxes, not just home prices. Cook County (Chicago) has some of the highest effective property tax rates in the nation — 2.0–2.5% of assessed value annually. On a $400,000 Chicago home: $8,000–$10,000/year in property taxes. On a comparable $300,000 Nashville home: $1,200–1,800/year. The annual property tax savings alone: $6,000–8,000. Over 20 years: $120,000–$160,000. Combined with no state income tax in Tennessee (vs. 4.95% in Illinois): the annual total tax savings for a $100,000 income earner moving from Chicago to Nashville: property tax savings ~$7,000 + income tax savings ~$4,950 = ~$12,000/year in total tax reduction. That is the financial math driving the Chicago exodus. Chicago real estate in 2026: prices flat to declining in most submarkets; inventory building; distressed property opportunity exists for long-term investors who believe in the city’s eventual stabilization.
The DC Anomaly: The DOGE Effect on Migration
Why Washington DC Suddenly Appears in the Exodus Data
Washington DC surged from #14 to #4 on the PODS outmigration rankings in 2026 — a sudden jump that precisely tracks the DOGE federal layoff timeline. DC prices are down 6.1% year-over-year as of February 2026 (GCAAR). Days on market in DC: up 161% year-over-year. DC real estate tax revenue: down 11.1% for the fiscal year. The federal workers leaving DC are not all going to other expensive cities. Many are relocating to their home states or lower-cost metros — taking their government salaries (for those who found new work) or their buyout proceeds to markets where that income stretches dramatically further. This creates a buyer opportunity in the DC metro for buyers who are not federal-employment-dependent and who are willing to buy in a softening market.
“The conversation I have with every California buyer who asks if they should leave: "I’m not going to tell you to move. That’s a life decision, not a financial formula. But I will show you the actual numbers. In California, your $120,000 income qualifies you for approximately $415,000 in home. The median California home: $820,800. You are priced out of the median by $405,800. In Raleigh, NC on the same $120,000 income: you qualify for the same $415,000 and the median Raleigh home is $420,000. You can buy the median home in Raleigh on your current California salary. If you go remote and keep your California salary: you can buy in most Texas, Tennessee, or Carolina markets at well above median. If you take a local job in Raleigh and earn the local median: $82,000 — you’re still within $40,000 of the median home. You run those numbers and then you decide whether the California life is worth the California premium. That’s a personal decision. The math is the math."”
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®
Is it cheaper to live outside California?
Yes, substantially. California Policy Lab data (March 2026): Californians who move out of state save an average of $672/month in total housing costs. Monthly housing costs in California average $2,376 vs $1,705 in destination states. The median home price in destination neighborhoods is $398,000 lower. After 7 years, former Californians are 48% more likely to own a home than comparable Californians who stayed. The trade-off: destination neighborhood incomes are also lower, by approximately $15,000–20,000/year. For remote workers maintaining California salary: the relocation math is almost always positive. For in-person workers changing jobs: run your specific numbers.
Where are people moving from California?
Top destinations for Californians, by moveBuddha 2026 search interest: Texas (#1, especially Dallas-Fort Worth and Houston), Arizona (#2, especially Phoenix and Tucson), Washington (#3), New York (#4), Nevada (#5, especially Las Vegas). North Carolina, Tennessee, and Florida round out the top 10. Among higher-income California movers specifically: Texas, Florida, and Nevada dominate (zero state income tax is a primary driver). After 7 years, California leavers end up in neighborhoods where 60% of residents own their homes, vs 53% in the neighborhoods they left.
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— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)